This May, the Euribor has once again fallen, marking its fourth consecutive decline, and now stands at 2.081%, the lowest since August 2022. The mortgage indicator benefits from favorable inflation data —2.2% in the eurozone— and fears of slower growth due to a trade war, prompting the European Central Bank to consider further interest rate cuts.

Although the change from April, when it was at 2.143%, is slight, it will impact mortgage calculations. The key comparison is with a year ago, when it was much higher at 3.680%. This annual drop is the largest since December 2009, over 15 years ago. For an average mortgage, this translates to a savings of about 137 euros monthly or 1,644 euros annually, based on a typical mortgage of 145,673 euros over 25 years according to 2024 INE data.

The declining Euribor, which peaked in October 2023, has a dual effect. On one hand, those with variable-rate mortgages are seeing their payments decrease significantly, freeing up money for other expenses or savings. On the other hand, potential homebuyers find it easier to purchase due to lower interest rates offered by banks, thereby increasing their chances of loan approval.

This has spurred property sales in Spain, experiencing its most significant growth since the real estate bubble, with over 180,000 transactions in the first quarter of 2025. Unlike the early 2000s, there are no signs of uncontrolled growth, partly due to stricter credit regulations post-2008 crisis.

Antonio Gallardo, an economic expert at Asufin, describes May as a calm month for Euribor, especially compared to April when US President Donald Trump stirred tariff conflicts, causing fluctuations that ended with a substantial monthly drop. "There's more stability now. A new German chancellor was elected, and the underlying trend remains downward, but without major shocks," he notes.

In May, Euribor decreased on 12 occasions, rose on eight, and remained unchanged once. According to the latest National Statistics Institute data from March, the average interest rate on newly signed mortgages has fallen below 3%, specifically to 2.97%. That month saw significant growth in both the number of mortgages (up 44.5%) and the capital loaned (up 65.2%), indicating that favorable financing conditions are encouraging market entry.

The mortgage comparison service iAhorro suggests that a further interest rate cut by the ECB next week could push Euribor below the 2% daily rate, likely in June. They highlight that the sharp drop in Euribor is affecting financing. "Variable-rate mortgages now have almost no market share, with fixed and mixed rates taking over." In March, 49.12% of iAhorro users chose fixed rates, while 50.88% opted for mixed rates.

Official INE data shows fixed-rate mortgages hold a larger share, representing 66.8% in March, the highest percentage since January 2023. The ECB will meet again next week, and the market expects another interest rate cut, lowering it to 2%. This would be the seventh reduction in less than a year, the sixth in a row. Factors such as the trade war, which is deflationary for Europe unless there are reprisals from Brussels, and the stronger euro against the dollar, enabling cheaper international purchases, help contain inflation.

Salaries are also moderating: wages in the eurozone rose by 2.4% in the first quarter, well below the 4.1% from the last quarter of 2024 or the 5.4% from the previous year's third quarter. This paves the way for further ECB rate cuts by dispelling fears of a price-wage spiral.

These reductions sometimes take months to translate into more attractive mortgage offers. As Pablo Vega from the Roams comparator points out, "Banks are hesitant to make significant adjustments following the last ECB meeting. The most attractive offers remain tied to classic bonuses [payroll and home and life insurance], and even then, they don't fall below around 2.50%." The key to reducing that percentage lies in negotiation with the bank, where more solvent profiles have an advantage.