Three years ago we learned the news that EMMI, the European Monetary Market Institute, was beginning to develop the Euribor Plus, an improved version of the current Euribor. Under the premise of being a less manipulable, less volatile and more truthful index, this update could lead to a substantial increase in mortgage payments in our country. According to a study by the comparator of banking products Good Finance , variable mortgages could increase up to 1,800 euros per year.
Extinction of the index and change to IRPH
According to EMMI statements, the Euribor plus should not be considered as a new index , but as an improvement in the calculation system. In spite of this, according to information to which HelpMyCash has had access, some entities could contemplate the change as an extinction of the current Euribor, using the substitute index as established in the different mortgage contracts.
This is where millions of mortgages could be affected by one of the worst scenarios, since one of the main substitute indexes in our country is the IRPH entities . Traditionally this index is about two percentage points above the Euribor. Without going any further, the latest IRPH publication showed a price of 2.007% versus 0.048% negative for the 12-month Euribor.
In other words, if today the Euribor plus came out and this scenario of rejection of the index occurred, the interest of the affected mortgages would go from subtracting 0.048 from its differential to add 2.007.
If we move this case to concrete figures, for an average mortgage of 150,000 euros and an interest of Euribor plus 1% at 25 years, we would be talking about moving from a quota of 562.06 euros to 711.86 euros per month . 150 euros more per month or 1,800 euros more per year .
75 euros more per month, if the Euribor plus appears at 1%
The creation of the Euribor plus is being done under the guidelines of the Financial Stability Council (FSB), which recommends that the change should be made with the least possible impact. According to this indication and after what is indicated by the EMMI, it is expected that its output value will not be very different from the current price of the Euribor, although there is a great climate of skepticism regarding the new version appearing with a negative value.
In order to know the scope of the different initial values that the Euribor plus could have, Good Finance has carried out a study that simulates what could happen with the share of the same previous average mortgage (150,000 euros, at 25 years, and a Euribor interest + 1%), in three possible scenarios:
Euribor plus at 0%. If the Euribor plus entered into force today with a value of 0% and we maintained the differential of 1%, consumers would go from having a quota of 562.06 euros to a monthly payment of 565.31 euros. A minimum rise of 3 euros per month.
The fee would increase to 599.90 euros
Euribor plus 0.5%. On this occasion, the fee would increase to 599.90 euros. That is, 37.84 euros more per month and 454.08 euros more per year.
Euribor plus 1%. In this scenario, in which the price would be a percentage point higher than that of the current Euribor, the differences would be more pronounced. The monthly installments would amount to 635.78 euros, which would generate an increase of 73.72 euros per month and 884.64 euros per year.
The launch of the Euribor Plus is planned for 2017, once it has passed the validation test by the main economic players. However, it should be said that its entry into force should have been during this year 2016, but it was delayed precisely after the negative response of a previous test.