Helsingin Sanomat on Tuesday highlighted that the rate has experienced a larger monthly change only twice in its history, falling 0.914 points in March 2008. The 0.146 point change seen yesterday was also quite unprecedented, as larger daily changes have occurred only six times since early 1999.
The total mortgage interest rate is determined by the reference interest rate and the personal interest margin.
The Bank of Finland has reported that the interest margin on housing loans was 0.71 percent on average in July-August 2021. Because of the negative interest rate, borrowers have therefore paid an average of 0.71 percent interest on their mortgages.
The upswing observed this month creates a difference in the interest rates of loans taken out at the end of July and August. If the rate is set on July 29, the total rate, including the 0.71 percent margin, will be 1.631 percent next year. However, if the interest is set on August 30, the total interest including the margin is 2.468 percent.
The rise in Euribor interest rates is expected to continue at least until the end of this year.
Jan von GerichNordea’s Chief Economist, told Helsingin Sanomat reported on Monday that the 12-month euribor may rise to two percent by the end of the year.
“Euribor interest rates are rising rapidly again. [The European Central Bank] has confirmed the impression that inflation is the central bank’s biggest concern,” he commented. “The decision-makers see that the accelerating inflation is not only caused by the rise in energy prices, but by broader inflationary pressure. The messages are clear: the central bank has to raise interest rates for its own credibility, even if it slowed down the economy in the short term.
Analysts estimated earlier this summer that the slowdown in economic growth would reduce the willingness to raise reference interest rates, taking into account the effect of rising interest rates on the demand for commodities.
Aleksi Teivainen โ HT
Source: The Nordic Page
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