Misura Blog Financial Information For Better Live

Euribor and IRS in the downhill ….

The Euribor three-month interbank rate has fallen by more than 3.5% compared to October 2008, bringing families save an average of 200 Euros per month, which can reach to over 400 for a thirty-year loan of 200 thousand Euros. These are the data processed by Mutuionline, which are based on the rate of 1, 76% last Friday.

The cut in base rates, which touched the record low of 1, 5%, resulted in the vertical drop even one month Euribor, the 1, 36%, and that one week, now all ' 1.09% o.

The Bank of Italy, said that interest rates have fallen below 5%, in addition, also in January, the average rate on new bank loans to households decreased to 4.78% from 5.08% in December while APR is the rate dropped to 4.89% (from 5.18% in December). Families, in fact manifest the decision in choosing the variable rate in the first two months of 2009 requests, according to surveys Mutuionline, nearly doubled from 17.2% to end 2008 to 39.7%.

Are the same banks to engage with the variable, to the detriment of the spread that is always higher? The banks, in fact, they buy most of the capital with which to finance their activities on the interbank market in the short term, thus paying a cost equal to Euribor, while the rate of fixed-rate loans are calculated taking into account the indices IRS, too 'it to the minimum levels at this time (the twentieth anniversary is equal to 3.83%).

However, many institutions require that, once this crisis, the Euribor will again go up even more than 4%, and then fear in the future to obtain loans at fixed rates less than they will spend the money to buy the funds: from here, the choice to discourage fixed-rate loans.

Banks also are demanding more guarantees for those who want a mortgage, from bonds to insurance cover. And they are increasingly less frequent granting of funds to buy the house up to 80% of value in order to cover a higher percentage is used increasingly to insurance protecting banks for the remaining 20%.