The ECB raises interest rates in June and they reach 4%

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Those who were thinking of applying for a mortgage in the summer have their fears confirmed: the ECB raises interest rates in June and they already reach 4%. Below we tell you all the details about the measure, the short and medium-term forecast and what you can do to alleviate the effects of the rate increase on your variable mortgage.

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With the increase in interest rates in June, there are already eight
It was taken for granted, but confirmation was lacking. The ECB raises interest rates in June by 25 basis points and will reach 4% , a level not seen since the 2008 crisis. For the marginal credit facility, rates rise to 4.25%, and for the deposit facility, at 3.50%. These increases will be effective from June 21 .

This is the eighth consecutive increase since, in July 2022, the ECB adopted the rate hike as a strategy to combat inflation. The interannual rate fell from 7% in April to 6.1% in May, but we are still far from the moment when inflation will cease to be a problem for the eurozone.


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Forecast of the ECB's action on interest rates

Analysts predict some more increases , but it is uncertain if the last one will come in July or even September. Whatever the case, the latest rate hike will not immediately give way to a rate drop. Next will come a transition period , with stable interest rates, until a progressive de-escalation that would begin in 2024, perhaps in the second half of the year.

The Federal Reserve stops the increase in interest rates in June
As usual, the ECB's announcement comes after that of the United States Federal Reserve . In this case, the uncertainty about his decision was greater, and it was resolved yesterday, Wednesday, June 14, with the resolution to stop the rate increase .

In the United States, the decline in inflation is faster than in the euro zone. The interannual rate, in May, was 4%, 2.1 points less than in the eurozone. However, this pause does not rule out future increases, and the Federal Reserve reaffirms, like the ECB, its intention to reduce inflation to 2%.



Effects of the ECB rate hike and ways to alleviate them
If you have, like most Spaniards, a variable mortgage, you already know that these rate increases directly affect your payments. To get an estimate, use our mortgage plus expenses simulator .

Despite everything, there are ways to alleviate the consequences of rate increases. Below we give you some ideas to improve your mortgage in the current situation.

Mortgage subrogation
Interest rates rise the same for all banks, but not all banks offer the same conditions. Subrogating your mortgage means transferring it to another financial institution. Use a mortgage comparator and check if with another bank you could bear your mortgage more lightly.