Everything indicates that the Euribor will continue to fall in the coming months, after the European Central Bank (ECB) announced a new cut in its key interest rates this Thursday, September 12th. This means that families who are paying variable-rate mortgages will see new relief in their repayments.
But that's not all. Those who are thinking of taking out a new loan to buy a house will pay much less. This whole scenario should further encourage demand for houses for sale, which will put even more pressure on house prices in Portugal, if the housing supply does not keep up with this trend.
The Euribor rates have been falling in recent months, anticipating the ECB's interest rate cut in September, which was taken for granted. And the truth is that the European regulator led by Christine Lagarde actually went ahead with a reduction in the refinancing rate by 60 basis points, setting it at 3.65% at the monetary policy meeting held this Thursday, September 12th.
The truth is that Euribor rates have already been discounting this ECB interest rate cut, so much so that the average monthly rates fell in August for all maturities to the following values:
12-month Euribor: the monthly average in August was 3.166%, down 0.36 percentage points (p.p.) compared to July (3.526%);
6-month Euribor: this monthly rate fell to 3.425% in August, down 0.219 p.p. compared to the previous month (3.644%);
3-month Euribor: the rate for the shortest term fell from 3.685% in July to 3.548% in August (-0.137 p.p.).
These recent reductions in the Euribor in August reduced the repayments of new housing loans in Portugal (at variable rates) by tens of euros. And, if the Euribor continues on this trajectory in the coming months, the repayments will fall even further, encouraging the purchase of homes in Portugal.
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Source: Idealista
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