130614_SU_WOLF_VALLEY_GOLF_COMPETITION Sam Miller with Angie and Andy Madden.JPG

Euribor with lower interest rates

The Euribor rate, which acts as a mortgage rate benchmark for the home property market in Europe, is to fall in February.

It means that repayments from March should be less for those who have variable mortgage contracts.

Despite the fact that the European Central Bank in December set the interest rate at 1%, the market has reacted slowly to the news.

According to a simulation undertaken by consumer rights group Deco, repayments will continue to rise in February for those who have their mortgages index-linked to the six-month Euribor.

For example, a mortgage credit worth €100,000 with a 2% spread over 30 years will see repayments rise by €14.34 in February.

The European Central Bank cut interest rates in the Euro Zone by 25 base points, at the start of December, to 1%.

However, lack of confidence in the interbank markets, which sets the Euribor rate for various periods for bank to bank lending, has made it difficult to pass on these reductions to the consumer and the mortgage holder.

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