O The European Central Bank (ECB) decided to raise interest rates again last week, and the move could have repercussions. the impact of up to 234 euros on the provision of home loans this month, on modeling Deco/Money&Rights.
How will this affect your particular case? Doctor Finance provides an Euribor simulator that you can access here – which allows you to “get an idea of how an increase in interest will affect your monthly premium”.
The personal finance company points out that in order for the values to be as realistic as possible, you need to enter the following data not a simulator
- The term of your Euribor bet: 3, 6 or 12 months;
- The month in which your benefit will change after the review;
- The value of your spread;
- the amount of outstanding principal debt;
- The number of outstanding payments on your loan;
- And finally, choose the Euribor rate you want to simulate.
“While many people are worried about rising interest rates, be aware that your monthly loan payment there will never be a dramatic increase overnight. After all, the European Central Bank is acting progressively,” Doctor Finance explains.
On practice, “when your work is evaluated (according to the terms of the Euribor rate with which you entered into the contract), an Euribor update will be applied, which will later be added to the value of your spread. These two components (Euribor rate + spread) determine the value of your TAN (nominal annual rate), i.e. the interest rate on your mortgage.”
Doctor Finance recommends:knowing the impact of interest on your loan, it’s time to take action. And this is why? Because you will probably have to make certain adjustments so as not to jeopardize your financial stability.”
One solution is revise the terms of the loan: “Talk to the bank where you got the funding and find out what can be done. In other words, try to find out if the bank has the ability to lower the credit spread.”
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