An increase in the additional contribution paid by households with an adjustable rate mortgage is calculated at 50 euros per month. interest ratein connection with his rise 3-month euroboron to 0.816%, excluding a key rate hike of another 75 basis points announced on Thursday ECB. The increased contribution is compared to what households paid when the Euribor was at zero, that is, from mid-July, when the ECB announced the first increase in interest rates by 50 basis points.

Since then, the 3-month Euribor, on which most home and business loans are valued, has risen steadily, hitting 0.816% yesterday.

Given that forecasts raise the 3-month euribor above 2% by the end of the year – estimated to reach 2.05% – the burden of the monthly installment on the average mortgage loan, i.e. 100,000 euros and with an initial interest rate of 3%, it is expected to exceed 100 euros and, depending on the repayment period, reach 110 euros compared to the installment they paid in July.

These are loans that have been taken out over the last five years that have most of the payment in interest, making these borrowers the big losers in today’s rising interest rates.

For small businesses, an increase in the 3-month euribor from mid-July means a fee of about 80 euros per month for an average loan of 200,000 euros with an initial interest rate of 5.50%, but which will exceed 200 euros if the Euribor reaches 2%, as say forecasts. An even bigger increase of up to 2.50%, which is forecast for next year, means that the increase in the monthly payment on the same loan is about 260 euros and is a significant burden for small businesses, which are already facing increased operating costs. Price.

As written “TO”, the burden of rising interest rates is currently bearable for households with loans from the past, i.e. from 2005 to 2008, and in recent years they have been consistent in their commitments. These borrowers avoid regularizing their loans and therefore extending the repayment period of their debts. These loans have closed the interest period and therefore borrowers are now repaying mostly principal and less interest and are big beneficiaries of the low interest period as they took out a loan with zero interest rate and low spread and are not affected by rising interest rates today. This is also the reason why, despite concerns, there is no wave of conversion of these loans from floating rate contracts to fixed rates.

Households are already paying an extra €50 due to the increase in the 3-month euribor rate to 0.816%.

In addition to borrowers who have taken out variable-rate loans over the past five years and who bear the brunt of interest rate hikes, those whose loans have been transferred to funds have also been the biggest losers.

Most of these loans are deeply indebted, and thus measures that have been taken from time to time, either by banks or by management companies, have led to a significant increase in their repayment period, as well as an increase in the interest payment period. .

All of these loans have floating interest rates, and given that they have been repaid twice and thrice to date, they have extended their repayment periods to 30 or even 40 years, thereby losing the benefit of leaving their loan’s interest period behind. . Thus, the burden they will bear due to higher interest rates will further increase their service costs, exacerbating the already precarious financial situation in which these households and businesses are supposed to be.

It should be noted that the loans that were sold to the funds amount to approximately 89 billion euros, of which 25 billion euros are housing loans, another 19 billion euros are approximately consumer loans, 33 billion euros are business loans and 12 billion euros are loans. for freelancers and individual entrepreneurs. The renegotiation of these loans would put these borrowers at a disadvantage in the wake of higher interest rates, and the risk of a recurrence of new delinquency looms.

The biggest losers are savers, who see the real value of their savings vanish due to high inflation as well as extremely low yields on time deposits.

The average interest rate on term deposits is close to 0.10%, while high inflation at 11.1% reduces household income.

Banks have announced that they will spend about half of the increase made by the ECB yesterday as excess liquidity in the banking system – a €41.7 billion increase in deposits from January 2020 to date – is not putting pressure on deposit chasing, cutting benefits for savers.