Loan holders with a floating interest rate are expected to be favored by Euribor’s fall below 3%. The market has not seen these levels since November 2022.
Financial markets have already discounted a drop in Euribor, driving the mortgage rate below 2% in 2025 – to around 1.8% at the end of next year.
“This downward trend experienced by Euribor directly affects mortgage installments,” market representatives explained to Naftemporiki.
“A mortgage of 140,000 euros for 30 years with a difference of 1% from Euribor, with reference to the index of September 2023, which was at 4.149%, had a monthly installment of 757.81 euros. With Euribor at 2.945% in September 2024, the mortgage installment fell to 632.06 euros, that is down 125.81 euros.”
The sharp decline in Euribor is due to the fact that both the ECB and the Fed cut interest rates this month. The European Central Bank was the first to do so with a reduction of 25 basis points, but the Fed proceeded more aggressively with a cut of 50 basis points, thus putting pressure on the ECB so that a new cut at the October meeting is not ruled out. Financial markets are even discounting sharp interest rate cuts that could accelerate Euribor’s decline.
