At its last meeting in February, the ECB decided to raise interest rates again, and it will be the fifth in less than a year. In twelve months, the reference index for mortgages has gone from being negative to reaching 3%. And a rise in the Euribor in 2023 is not ruled out, along with more measures aimed at returning inflation to around 2%.
In fact, forecasts point to a new rise in the Euribor in 2023, reaching rates unknown since 2008. If in January 2022, it stood at -0.477, by the end of 2023, it could touch 4%.
The unstoppable rise of Euribor has put many families with variable-interest mortgage loans against the ropes. The reference index has gone from negative to close to 3% in a few months. To avoid the burden this entails for the most vulnerable families, the Government of Spain has approved a package of mortgage aid.
These measures, which will benefit close to a million households according to official forecasts, will come into force at the beginning of 2023. Although these actions were agreed with the banks, it is up to them to adhere to the so-called Code of Good Practice.
The IRS tax will substitute Euribor next April 2012 in Spain
As it appears today in The Washington Post, central banks expand system of ‘swapping’ money to ease credit crunch. The Interest Rate Swap (IRS) tax will substitute Euribor next April 2012 in Spain.
The Washington Post explains it this way: "The swap lines are a global form of the central bankers’ “lender of last resort” role, backing the world banking system.
The way it works is the Fed lends dollars to, say, the ECB, in exchange for euros of comparable value. The ECB pays interest, and lends out the dollars to banks in the euro currency area that have obligations in dollars but are temporarily unable to borrow dollars to meet them.
The swap lines themselves are not new — they were first introduced in December 2007 in response to deepening difficulties of banks funding themselves. They were used in vast amounts during the financial crisis in the fall of 2008 and were reintroduced in May 2010 when Europe’s financial troubles worsened".
Substituting Euribor with the Interest Rate Swap tax, though, will make Spanish banks interest grow up to one point. Consequently, homebuyers will end up paying higher interests in their mortgages.
Not so sure this will make things easier for mere citizens.
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