Euribor Hits 4.02%: Variable Mortgages Back to 2008 Levels

Euribor Above 4%: First Time Since 2008, and No One Has Collapsed

The twelve-month Euribor has crossed the 4% mark. It stands at 4.02%, a level not seen since 2008 and one that, just over a year ago with the index near 0%, was considered impossible. The barrier has been broken without visible drama: no bailouts, no queues at banks, no empty terraces. What has changed, and suddenly, is the monthly bill for variable-rate mortgages.

The data arrived with the coldness of a balance check. Nothing extraordinary until it translates into euros.

From €1,300 to €2,000 a Month: The Homeowner's Calculation

A €300,000 home, financed with a mortgage at 5% APR—which is already being offered—results in a monthly payment of €2,000 over 20 years. A year ago, that same loan was paid with about €1,300. The monthly difference cannot be absorbed by an average salary, especially with the soaring cost of groceries.

In single-month reviews, specific cases are already appearing: payments increasing by €380 and others going up by €500. The average salary increase is between 5% and 8%, insufficient to cover the sum of inflation plus interest. Some are already dipping into savings to make ends meet.

And not everyone starts from the same position. Old mortgages retain a tax deduction of up to €9,000 annually, a cushion that newer ones do not have. Those who can pay down their principal taking advantage of this tax loophole are better off than those who cannot.

Is the 2008 Crash Coming, or Is This Just a Scare?

The parallel with 2008 is in every conversation. One school of thought holds that we are in the autumn of 2007 and that there is a year of denial left before everyone realizes it. The opposing argument is colder: as long as there is no unemployment, this is not 2008. And today, employment is holding up.

The real estate market depends on credit, and credit has become brutally expensive. Some consider any price increase doomed, while others recall that owners who don't need to sell won't lower prices: the asset, after all, is paid for in a currency that loses value every month. Any drops, if they occur, will be small and slow unless there is a serious credit event.

What is less debatable is that the current situation is not like 2008. Mortgage debts then ranged from €200,000 to €400,000; now, in many cases, they are half that. The problem has shifted: the over-indebted party is no longer the family, but the State.

The Trillion in Deposits Still Unremunerated

While credit is charged at 4%, deposits are still paid at 0%. Banks accumulate around one trillion euros in personal savings without interest, and report record profits. It's the cycle's most silent arbitrage: money comes in for free and goes out expensively.

Calculations of how much a mortgage holder saves by switching banks, or how much is lost by those with idle savings, show surprising differences. But this requires action, and most people don't take it.

August, September, and the Coming Autumn

The review of mortgages doesn't happen all at once. Those due in August will fall during the holiday break, when almost no one is looking at their bills. September will be the first serious warning, and autumn will be the scenario where crisis announcements accumulate. If the Euribor doesn't ease, the pressure on consumption—bars, hotels, retail—will arrive with a delay, but it will arrive.

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With money becoming more expensive and savings yielding nothing, a price correction would be reasonable. However, don't bet your salary on it happening soon: rates could drop in a year or stay high for a decade, and no one has a crystal ball. The only verifiable fact today is the 4.02% on the bill.