Borrowers face steep increase in mortgage tranches
The effects of the European Central Bank’s first interest rate hike in 11 years last week will be seen in the next tranche of borrowers’ loans.
For a mortgage loan of 100,000 euros, an interest rate increase by half a percentage point is equivalent to a surcharge of €25. If the increase stopped there, the borrower of such a loan would incur half an additional installment in a year.
However, as the ECB will continue raising rates, the monthly installment surcharge will reach at least €50 until the end of the year.
Markets expect a further upside of the three-month euribor to 1% by the end of September and 1.55% by end of the year.
