Spain's euribor and the end of near-zero interest rates

Euribor's resilience against inflation redefines access to housing in Spain

The Spanish mortgage market is at a turning point where years of negative rates and stability appear to have given way to sustained upward pressure. With the euribor hovering near 4%, the cost of money is no longer a gift but the main driver of adjustment in consumption and real estate investment.

The trap of the French system and mixed mortgages

Although the rise in euribor causes immediate outcry, its impact is not uniform. Many homeowners take refuge in the security of fixed rates or mixed mortgages, which have served as a shield for much of the past decade. However, mixed mortgages are starting to show their seams: after an initial period of stability, the jump to the variable component is causing a notable increase in monthly payments.

The French amortization system plays a crucial and often misunderstood role here. In the early years, most of the payment goes to covering interest; therefore, early revisions are much more aggressive than those that occur when the principal is well consolidated. A detailed analysis of a €300,000 mortgage shows how, after ten years of a 1.8% fixed rate, the payment can jump significantly when faced with a euribor around 4%.

Persistent inflation and the wealth transfer plan

Current economic policy seems to trinc a roadmap where inflation remains high as a strategic tool. By keeping rates above 2% for a prolonged period, the system seeks to reduce public and private debt while transferring accumulated value from savers to new generations.

This scenario poses a dilemma for the real estate market: while housing prices have remained high, purchasing power is being suffocated by wages that do not always keep pace with rising costs. The result is a paradox where new sales suffer more than consolidated ones, leaving potential buyers trapped between bubbled prices and a euribor that no longer forgives.

The future of supply and renting

With growing difficulty in accessing a mortgage, the rental market is heading toward upward pressure. The scarcity of available housing, coupled with the inability of many families to make the leap to ownership, is turning rents into the main—and often more expensive—route to housing stability.

The trend points to a scenario where housing becomes a safe-haven asset against inflation, but with an increasingly high entry barrier. The market continues to wait to see if the euribor will stabilize near 4% or if the central bank's "hawks" will allow the final price of homes to begin showing the declines that logic dictates.

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The big unknown lies in households' ability to absorb these revisions without sacrificing their purchasing power, especially when inflation remains the invisible engine driving every euro in the market.

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