The Euribor is the benchmark for most variable-rate mortgages. In 2009 this index marked a maximum of 5,393. However, from this moment on it fell to negative values. After 4 years of negative Euribor, experts predicted a rise during 2019. However, it was in September of that same year, when the Euribor reached its all-time low of -0.339. The Euribor 2020 forecast is that it remains negative, but marking an upward trend.
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What is Euribor and how is it measured
The Euribor is nothing more than an index that measures the interbank interest rate . That is, the interest rate at which banks lend money in the short term. Despite the fact that the Euribor varies from day to day, banks tend to take the annual average as a reference. But it is also possible that they review it semi-annually, quarterly or even monthly. In fact, there are nine different types of Euribor that depend on the term taken to review it.
When we talk about the Euribor 2020 forecast, therefore, we will talk about the trend that this index will follow during the year that is just beginning. However, the final value and how it affects you in the mortgage, will depend on how it is calculated.
Who benefits from a negative Euribor
Lowering interest rates means reducing the price of money . What you want to do with a measure like this is to encourage consumption. When saving does not generate returns, but borrowing is cheap, consumption is reactivated. In short, what is sought with low interest rates is to reactivate the economy.
So then, the Euribor responded logically. After the hard blow of the crisis, low interest rates reinvigorated the economy. With a negative Euribor , the interest rates paid for a variable mortgage are now lower than a year ago. This benefits the consumer and encourages them to buy a flat . As a consequence, the real estate market also recovers. However, with an economy that is already showing signs of recovery, what will the Euribor 2020 forecast be?
Euribor forecast 2020
According to a Bankinter report, the annual Euribor 2020 forecast is that it reaches -0.22%. This would mean that the value would be higher than the -0.261 points with which the annual Euribor closed in December 2019. Although the index would remain negative, when reviewing the mortgage with the annual Euribor, the price of the installments would increase .
However, this value of -0.22% is the more moderate 2020 Euribor forecast. On the pessimistic and optimistic side of the balance, the 2020 Euribor forecast would stand at -0.27% and -0.17% respectively. According to experts, this trend, which predicts moderate growth , is what awaits us in the coming years . But you don't need to be scared. The increases that are expected in the short and medium term are not abrupt, so a variable rate mortgage is still a very good option .
Euribor 2020 forecast and mortgage
If we pay attention to the Euribor 2020 forecast, we can draw the following conclusions:
Variable mortgage interest : For now, a variable mortgage implies paying interest of less than 1%. During the next few years, although the Euribor may rise a bit, the interest on your variable mortgage is not expected to skyrocket.
Variable mortgage vs. fixed mortgage : If the interest on a variable mortgage remains around 1%, in the coming years a fixed-rate mortgage will continue to be more expensive. Today, a fixed mortgage is around 2% and the Euribor is not expected to reach such values in the medium term.
One thing is the Euribor 2020 forecast and the other is reality. As seen in 2019, the forecasts failed and the Euribor reached a minimum. Who assures you that this year the Euribor will give us another surprise? Be that as it may, if you are interested in taking out a mortgage , let our mortgage advisors take care of it. Find the best financing with Housfy .