Mortgage interest forecast December

The interest rate outlook for December is strongly influenced by the new crisis measures of the ECB. What effect does this have on mortgage rates?

ECB announcement

 ECB announcement

At the end of October, the President of the European Central Bank, Draghi announced that the crisis measures might be extended. The Eurozone is still struggling with low inflation.

Hoping to stimulate spending, the ECB makes borrowing cheap through crisis measures and saves money. This is the main cause of the current low mortgage interest rate.

Fireworks expected

Fireworks expected

The market therefore expected fireworks from the ECB when the Board met on December 3 to decide on new crisis measures. The ECB was expected to intensify and / or extend the buy-in program. The ECB could also decide to lower the policy rates.

The market speculated on the new support measures last month. In anticipation of the ECB’s interest rate decision, short-term (Euribor) interest rates in particular fell. This is now also reflected in the mortgage interest. The variable mortgage interest rate, which is linked to the Euribor, has already fallen for a number of lenders.

Markets disappointed

 Markets disappointed

However, disappointment prevails after the ECB meeting. Although the ECB is pumping another 360 billion into the economy by extending the buy-up program until March 2017, a reduction in the base interest rate has not been achieved. Investors had hoped for more.

Mortgage interest expectation December

Mortgage interest expectation December

Taking into account these new measures, we expect the mortgage interest rate to fall slightly further in December . With the extension of the buy-back program, the ECB’s measures will have a depressing effect on mortgage interest rates for longer.

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History mortgage interest forecast:

2016

  • Mortgage interest forecast January

2015

  • Mortgage interest forecast November
  • Mortgage interest forecast October
  • Mortgage interest forecast September
  • Mortgage interest forecast August
  • Mortgage interest forecast July
  • Mortgage interest forecast June

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