The cut in interest rates and Euribor are not directly connected.
We must say that the decision agreed upon between the world's central banks (including the ECB, the Central Institute of the euro) to cut interest rates by half a percentage point is a half-good news for the Italian families in debt.
It is, in fact, a move upstream in the sector of interest rates that do not directly affect loans and, more particularly on mortgages. To be precise, the discount rate is the official interest rate at which the European Central Bank lends money to banks.
The adjustable-rate mortgages, however, are in most cases, anchored at Euribor (Euro Interbank Offered Rate). The latter is the average rate at which financial transactions take place in euro among large European banks and is therefore an indication more reliable than the cost of money, because it records how much banks are willing to pay or to take cash out or pay a certain amount of €.
Before the rate cut by the ECB of the euro the discount rate was 4.25%, while the three-month Euribor was traveling at 5.377% and 5.435% at six months. In the past, any decision by the ECB, was followed by an adaptation of the Euribor rates in a short time, but the financial crisis of recent weeks, which has a deep underlying distrust between the banks (hence the ' rise in the Euribor rate at an historic high), could lengthen the time or do not even have any significant effect on the interbank rate.
waiting to know the developments in the coming days, if you have a mortgage with a variable rate linked to Euribor remember that still has the opportunity to renegotiate with your bank or transfer it to another bank (the so-called portability) .
Source: http://www.ilgiornale.it
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