Rate forecasts for variable rate mortgages


The forecasts on Euribor rates are very useful for those who subscribe to a variable rate mortgage, which changes over time. The loans for the purchase or renovation of a property can be fixed rate or variable rate: in the first case.

The interest to be paid does not change for the entire duration of the loan

The interest to be paid does not change for the entire duration of the loan

While in the second it follows the trend of some rates international reference. Among the main benchmarks, the most widespread are the ECB rate and above all the Euribor.

We must first specify how there is no single Euribor rate, but various versions are proposed, depending on the time period to which they refer. So we have the 3-month Euribor, the 6-month Euribor and so on. All these versions, however, measure the same phenomenon: they indicate the weighted average of the interest rates applied by the banks when they sell their loaned deposits. One of the ways in which credit institutions are financed consists precisely in borrowing from other banks the resources in their clients’ bank deposits, applying an interest to them. The Euribor, calculating the amount of this interest rate, therefore measures the cost of the financing faced by the banks and then “downloaded” to customers who request a mortgage.

Precisely because these are very complex calculations

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Which take into account the actions of many banks at European level, it can be difficult to predict the trend of Euribor rates. Certainly, however, having an idea about the possible future developments of the chosen rate for our mortgage may be important, because these will have serious repercussions on the variable rate of the loan (always burdened by a spread, ie the remuneration of the bank).

Our advice is therefore to turn to specialized websites, which offer detailed information in real time about the Euribor. For example, the portal dedicated by Il Sole 24 Ore offers many interesting data: first of all, one can observe the historical trend of rates, which in any case can give an indication of their behavior. Furthermore, in the lower part of the web page that we have proposed to you, you can see the forecasts on Euribor 360 and 365 rates, which are among the most used by banks to determine the cost of mortgages: for each rate its entity is proposed in a series of deadlines (from 1 month to 12 months). But pay attention: the Euribor is updated daily and, even if the daily fluctuations are not excessive, it is always good to take this flexibility into account.