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Mortgage language: What is the Euribor?

Qué es el Euribor - Respondemos a la gran pregunta sobre nuestra hipoteca

When we made the decision to buy a new house, in addition to seeking the help of the best real estate professionals (such as those who are part of Agenzia Immobiliare Tenerife), we are faced with a host of questions that we can not always answer. For example, when hiring a mortgage, choose which bank. When taking this choice, undoubtedly another of the questions that we usually ask is what is the Euribor? Today, in our new blog post we will try to answer this question; This is usually a cumbersome subject but, nevertheless, we are going to try to face it as simply as possible.

What is the Euribor? The great question

Euribor, technically, is the acronym of Euro Interbank Offered Rate; that is, the European type of interbank offer. It is a reference index published daily that indicates the average interest rate at which a large number of European banks claim to grant short-term loans to each other, in order to lend it to third parties (both individuals and companies).

It is calculated as the average of the interest rate communicated by the main banks that operate in Europe; It is also used as a reference for mortgage loans, which affect the final price of the purchase of the new house.

Nuestra nueva casa, un sueño hecho realidad

How does Euribor work?

As we have said, the main banks publish their daily quotations of the cup, rounded up to two decimal places; with a maturity ranging from a week to a year. It is required that each bank enter their data, at the latest, at 11.00, according to Central European time, of each day. Two minutes later the data is published in the main providers of stock information, using the following pattern:

The highest and lowest 15% of the contributions are eliminated, while the resulting ones are averaged, rounding the result to three decimals.

The importance of Euribor in the mortgage of our new house

Without a doubt, when we take the step of buying a new house, and we go to our trusted bank to take out a mortgage, the Euribor is a determining factor. At the end of the day, when it comes to something that we are going to be involved in all our lives, it is convenient to know how it works. As we have said, in summary, it is the interest to which the banks lend the money among themselves, and then lend it to third parties.

The Euribor, after all, is a benchmark; a quantifiable value to be able to grasp when making forecasts. Taking the step of hiring a mortgage is not easy; and it is not mainly because of the large number of elements that are unknown to most. Interest rates, what is the Euribor, rates, deductions, all this adds to the already cumbersome process. However, if we know a little better how it works, we can face it more calmly.

Having our new home is like making a dream come true. The process, it is true, can be arduous; Even with some disappointments. However, the result obtained, which is none other than to lay the cornerstone on which to build our life, well deserves it. And, in addition, with more than. Adapting the famous phrase of Paris is well worth a mass, we could say that Our house is worth a mortgage.

From Agenzia Immobiliare Tenerife we ​​hope we have helped to understand a little better what the Euribor is; and with that, be able to help them start their future plans for their home.

 

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