Euribor Jumps Above 3% as Spanish Mortgage Borrowers Face Higher Payments

The Euribor interest rate has risen above 3% for the first time since August 2024, reaching 3.247% in September. This increase will have a significant impact on variable mortgage borrowers, who can expect higher payments in October. The yearly increase for a typical loan used in the comparison is €1,285.64.

According to Josep Soler, founder and executive adviser of EFPA España, the Euribor index often anticipates official interest-rate decisions and the market's view of the European Central Bank's next steps. Persistent inflation has added pressure to the market, with energy-price tensions linked to the conflict in the Middle East contributing to the increase.

The housing market is also experiencing a surge, with new and existing home prices rising 14.7% over the past year. The median value reached €2,129 per square meter, which is 2% above the nominal peak recorded during the 2007 property bubble. For an average household, buying a home now takes 36.9% of disposable income, a critical access condition according to Tinsa's data.

Borrowers facing a review should consider their options carefully, as fixed mortgages may provide short-term stability but are becoming more expensive. Mixed mortgages may offer an intermediate route, fixing the rate for an initial period before moving to a variable rate. However, Soler advises against making a rushed decision based solely on the latest increase, emphasizing that mortgage rates move through different cycles over time.