OREANDA-NEWS.  May 15, 2012. In the past half-year, the 6-month Euribor has dropped 79 basis points, or as much as 44%. Given a balance of EUR 37 250 on an average home loan today, the holder of a home loan stands to save EUR 300 a year or EUR 25 a month thanks to the decrease, reported the press-centre of SEB.   

A family with an average home loan, who is going to see the 6-month Euribor on their loan contract change, will save approximately EUR 25 on a loan repayment. On all of the approximately 156 600 home loans, monthly savings on loan repayments would amount to EUR 4 million. As the lion’s share of home loans have been issued with floating interest and are tied to the Euribor, the effective impact of the change in the Euribor will be almost of the same order.

“As a rise in the Euribor in the near future is not yet anticipated, it is possible today to fix the interest rate for 2 to 3 years at a level very close to the 6-month Euribor – the 2-year euro interest rate will be even lower than the 6-month rate, with the 3-year rate only slightly higher. Although fixing the interest rate does not guarantee lower interest costs in the end, it does secure relatively low loan repayments for a longer period of time,” Triin Messimas, Development Manager of Private Loans, commented on the low level of the Euribor and on the option of fixing the interest rate on a home loan.