Euribor fell below 2.5%, for the first time since September 2022, offering some optimism to loan holders.
Euribor, the benchmark for most floating-rate mortgages, fell to 2.495%, breaking the 2.5% barrier, which has not happened for more than two years.
Already, the Euribor average stands at 2.571% in November and if the decline continues, it will mean another cut for mortgages due to be revised at the end of the month.
The index closed at 2.691% in October, after falling for the seventh month in a row.
Euribor is calculated by a group of 18 European banks that report daily the interest rate at which interbank loans are granted.
“Considering the downward trend that Euribor is currently registering, the question is how long the decline of the index will continue,” banking sources said to “Naftemporiki”.
The same sources explained that everything will depend on the movements of the European Central Bank, which directly affect Euribor.
At the last meeting, the ECB cut interest rates again by 25 basis points. The deposit rate is already at 3.25% and is expected to drop to 3% at the December meeting.
“The market is already discounting that the ECB will cut interest rates in the following meetings, at least, until the summer of 2025,” the same sources emphasized. They even estimated that “it is normal for Euribor to approach the ECB’s official interest rate when the cycle of interest rate cuts is completed next year.”
This is very good news for those with variable rate mortgages, who now see a clear prospect of lower loans.
