# Is EURIBOR going to increase significantly?



## cousin_borat (14 May 2008)

I currently have a mortgage of 150k with the ACC for investment property. At the moment its EURIBOR + 1.25 = 6.1%. 

The next EURIBOR review is 21/7/2008. I'm hearing rumours that over the next few years EURIBOR is going to keep going up and up. Is this true? In that case it seems it would be best to dispose of the asset since it is gaining 4-5% per annum. It's very confusing with the current economic climate, ECB statements and other analysis. I'm not an expert in Macro Economics by any stretch of the imagination.


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## gerry m (14 May 2008)

No one knows for sure where rates will go, instead of selling why not go for a fixed rate? There are some good fixed commerical loan rate available if you shop around.


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## z109 (14 May 2008)

This might be some basis for it increasing:
http://www.bloomberg.com/apps/news?pid=20601087&sid=az3eSerjPuDA&refer=worldwide

Basically, LIBOR in sterling and USD, and EURIBOR are set by the British Bankers Association (BBA) which collates the amount that a number of reference banks claim they are borrowing money at. The 'claim' bit is important as it has been rumoured that some of the reference banks have been understating their costs of borrowing. So the BBA are investigating this. Which may lead to higer IBOR costs.


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## mercman (17 May 2008)

cousin borat - I hate to tell you that Commercial property is dropping in value (and quite rapidly). The economic downturn has shifted some serious pressure on Asset Values. As for the Euribor rates, the ECB is fully focused on Inflation only. Unless and until the price of Oil and Commodities decline in price, inflation will remain a problem.


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