Euribor rises toward 3%, impacting mortgage demand

The Euribor index has risen to nearly 3%, marking its highest level in almost two years. This upward trend is impacting the housing market by increasing the cost of variable-rate mortgages and tightening the debt-to-income ratios used by financial institutions to assess borrower solvency.

While the increase in interest rates has not led to an immediate or proportional drop in new mortgage applications, it is forcing buyers to operate with thinner margins. Competition among banks for solvent clients is currently mitigating some of the impact, with some lenders offering rates below the Euribor to attract high-quality profiles. However, the rising cost of money is expected to affect the risk analysis of new operations and the overall purchasing power of households.