The European Central Bank believes its benchmark interest rates are at the appropriate level in the current economic climate and would only consider making changes if conditions change significantly. This was stated by Vice President Luis de Guindos, who emphasized that The ECB's interest rates are at the right level while inflation, projections and the transmission of monetary policy evolve as expected.
This stance reinforces a tone of vigilance and caution, with Inflation heading towards the 2% target and growth that remains positive, albeit weak. For the Spanish and European economies, the message translates into continuity of monetary policy In the short term and under close scrutiny of the data, in an environment where uncertainty has moderated following the trade agreement between the European Union and the United States.
What has the ECB said?
De Guindos has insisted that the institution will maintain a very cautious stance in its decision-making. According to the vice president, services and wages are progressing in the expected direction, and inflation is approaching 2%, although growth in the eurozone remains tepid. In his words, the door to settings It would only open if inflation, projections, or the transmission of monetary policy deviate.
- Inflation, according to the ECB, will be very close to 2%.
- Growth is positive but still weak.
- Setting interest rates requires being prudent and cautious.
- The current level of interest rates is considered appropriate in the current conditions.
Market and currency reaction
The vice president's comments had a limited impact on the euro, which remained within a narrow range. The EUR/USD pair, according to current quotes, moved in a manner lateral around 1,1557, without major surprises after the statements.
How it affects mortgages in Spain
The narrative that ECB interest rates are where they should be has coincided with the end of the mortgage price war in Spain. With the monetary authority holding firm, several lenders have begun to raise their fixed rates, a reaction aligned with a Euribor rebounding and with the closing of margins. In this new context, Aggressive competition cools down for attracting mortgages.
BBVA has increased the interest rate on its 25-year fixed-rate mortgage from 3,57% to 3,67% APR, applying the maximum discount for the first six months and then adjusting the APR based on the customer's relationship with the bank. To access the best conditions, customers must, among other requirements, have a direct deposit of a salary exceeding €600 and sign up for a specific mortgage agreement. home and mortgage insurance.
Meanwhile, Santander has tightened its 25-year fixed-rate mortgage, raising the APR from 3,07% to 3,27% and reducing the maximum discount to 1%. Bankinter has adjusted its offer to 3,46% APR (from 3,30%) with all the associated requirements, while Coinc increased its 25-year fixed-rate loan from 2,93% to 3,09% with discounts. Executives at these institutions reiterate that they will not compete. “irrationally”.
ECB data up to September places Spain as the second country in the eurozone with the cheapest mortgages, second only to Malta, with an average rate of 2,7% compared to 3,32% for the eurozone. This difference exists within a market where selective price increases APRs are gradually gaining ground after months of discounts.
The Euribor, a key benchmark for variable-rate mortgages, has rebounded to levels not seen since March, with daily rates hovering around 2,216%. If the market buys into the "right level" interest rate scenario and downward inflation forecasts gain traction, experts see potential TIN something more content In the long term; in variable terms, the key will continue to be the agreed spread and the ability of households to absorb revisions.
Regarding standout offers, competitive terms are still available: Openbank's Open Fixed Mortgage offers a 2,98% APR, and Ibercaja's Vamos Mortgage is around 3,10% APR for eligible borrowers. Furthermore, Banca March has announced a "Green" bonus of up to 0,30% additional for homes with a better sustainability rating.
What the ECB will be monitoring from now on
The Governing Council will continue to closely monitor three fronts: the trajectory of inflation relative to 2%, possible revisions to macroeconomic projections, and the proper functioning of the transmission of monetary policy to the real economyAs long as there are no surprises on those axes, the ECB considers that its current position It is the appropriate course of action, although it does not rule out taking action if the scenario deviates from what is expected.
The message from the institution is clear: stable interest rates as long as the data supports it, contained volatility in the euro, and an upward adjustment in mortgage prices in Spain in response to a rising Euribor. inflation near target And with moderate growth, prudence continues to guide the central bank's roadmap and the commercial strategy of the entities.
