No one has a crystal ball to know for sure what the Euribor will do in 2023 or in the future. However, the short-term forecast for the Euribor seems clear: it will continue to rise.
Euribor forecasts for 2023
What will happen to the Euribor in 2023, a very important fact for mortgages ? The consensus of analysts and institutions expects it to continue rising in 2023. What changes depending on who looks at it is its upward path, something that has a lot to do with the evolution of the economy and inflation in general (we will explain this in detail later).
The ranges being considered for the evolution of the one-year Euribor in 2023 are between 3.5% and 4% . This means that the mortgage benchmark index will continue to rise, but at a much slower pace than the escalation experienced in 2022.
This is how analysts see the Euribor in 2023:
| Analyst | Euribor forecast 2023 |
| Funcas | 3.5% |
| OECD | 4.0% |
| Bankinter | 3.5% |
| Caixabank Research | 2.73% |
| ICU | 3.5% |
Of all of them, only one believes that the index will fall from the 3% it closed at in December. It is also true that at the beginning of 2022 no one expected the index to reach the current levels.
However, strong increases and jerks are not expected as in the last months of 2022, but rather a more gradual and sustained rise.
In this regard, José Manuel Fernández, deputy director general of UCI, explains that “we have seen this in the American market, which usually has a six-month lead time, and everything indicates that inflation will also begin to moderate in the eurozone, and especially in Spain, throughout 2023.”
The Euribor will begin to adjust once it reaches the 3.5% barrier, provided inflation remains under control. In addition, long-term interest rates could become cheaper, although not to the levels we have seen in recent years.
Why is the Euribor rising?
What is behind this rise in the Euribor in 2023? The black swan we referred to earlier has been the rise in inflation , motivated in part by the war in Ukraine and by the rise in the prices of energy and certain raw materials.
The orthodox and traditional way of controlling inflation by central banks such as the US Federal Reserve (Fed) and the European Central Bank (ECB) is to raise interest rates . And that is what both are doing and will continue to do until inflation is under control.
You can already imagine what happens to the Euribor when interest rates rise: it also rises. That is why it is expected to continue to rise in 2023.
How the Euribor will evolve in the coming years
What will happen in 2024 and 2025 with the Euribor remains to be seen and is a big unknown in many respects.
The reason is that in the current scenario we are faced with high inflation that must be controlled and, at the same time, with a recession in some of the major powers such as the United States. In this environment, the rise in interest rates, which is good for curbing inflation, is not good for stimulating economic activity. With higher interest rates, credit flows less and without money in circulation, consumption is lower.
For this reason, it is more difficult to know how the Euribor will evolve in 2024 and 2025 and there is also greater division among analysts.
The OECD believes that the index will continue to rise in 2024 to 3.7% before falling to 3.5% in 2025. The rest of the analysts expect it to return to around 2.5% in 2024.
What does seem clear is that the era with the Euribor at 0% or in negative territory will become a thing of the past , at least for a while.
How will this affect your mortgage?
If you have a variable mortgage, the rise in the Euribor will cause the rate to rise at the next review. It's that simple. How much? Well, it will depend mainly on whether it is a mortgage with a half-yearly or annual review . With the former, the increase has been and will be more gradual, while with the latter, you will notice the change more.
What if you're looking for mortgages? This information will help you choose between a fixed-rate or variable-rate mortgage and the interest rate you can expect. If you have any doubts, you can use this mortgage simulator to see what yours would be.
Remember that, in addition to traditional mortgages , there are also special loans such as mortgages to buy and renovate houses if you need to do work to leave your home the way you want it.