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The central reference rates for mortgages, Eurirs, Euribor, and ECB, differ. How do they vary with inflation, and how do they affect the cost of a mortgage?
The interest rate on your mortgage is one of the most important aspects to consider when deciding to borrow money. Understanding the differences between Eurirs, Euribor, and ECB rates can make a big difference in choosing the most suitable loan.
Let’s examine in detail how these rates work, how they vary, and what influence inflation has on them.
Euribor: variable-rate mortgages
The Euribor, or Euro Interbank Offered Rate, is the average interest rate paid by banks in the Eurozone to lend money to each other. Or, in simple terms, it represents the cost of money in the Eurozone at a given time. The Euribor is calculated daily by the European banking federation through the weighted average of the interest rates of the most active banks in the Eurozone. This index varies daily and can have different reference durations, from one day up to 12 months. For example, the three-month Euribor rate was 3.7% on 10 July 2024.
But what does this have to do with mortgages? The Euribor interest rate is the benchmark (or reference) used to calculate the interest rate of financial products such as personal loans, mortgages and variable-rate bank deposits. In other words, the instalments that those who have taken out a variable-rate mortgage have to pay vary directly to Euribor; if Euribor falls, they become cheaper.
Eurirs: fixed-rate mortgages
On the other hand, the Eurirs (Euro Interest Rate Swap) is the reference rate for fixed-rate mortgages. Like the Euribor, it represents the cost at which banks and other European credit institutions borrow money from each other at a predetermined cost. The Eurirs is calculated daily by the European Banking Federation and varies depending on the loan duration. The longer the period, the higher the rate applied. For example, as of 10 July 2024, Eurirs rates for a 20-year mortgage were 3.6%.
ECB interest rates
Finally, we come to the ECB interest rates, the ones we hear about most often, especially from 2021 onwards, as they have been raised to fight inflation. These are decided monthly by the European Central Bank and represent the rate at which commercial banks can borrow money from it. To understand the difference between previous lending rates and ECB interest rates, the ECB interest rate can be interpreted as the ‘wholesale price’ of money for European banks.
However, to understand how these vary, we cannot ignore inflation, an economic phenomenon that represents the general increase inprices over time and reduces the purchasing power of currencies.
But why does inflation affect interest rates? The relationship between these two values is not direct. Interest rates do not automatically change in relation to inflation since they are decided by the ECB. However, the world’s central banks intervene when the cost of money reaches worrying levels, in most cases, by raising them.In conclusion, choosing the right mortgage requires understanding the different reference rates and their variations. Eurirs offers stability for fixed-rate mortgages, while Euribor represents variability for variable-rate mortgages. The ECB rate directly influences the short-term cost of money, and inflation plays a crucial role in the economy, affecting all interest rates.
Which are the best self-improvement books? A list of ten titles you absolutely must read.
Identifying the 10 best self-improvement books is a challenging, nearly impossible task given that every reader has their tastes and may be driven by specific needs. However, given the incredible literary output in this field, it can be helpful to make a selection, especially for those who need to choose their first book of this type and don’t know where to start.
Here is our list of the 10 best self-improvement books.
“Deep Work” by Cal Newport
“Deep Work” explores the importance of dedicating oneself intensely to complex and meaningful tasks to achieve extraordinary results. Newport provides practical strategies for cultivating concentration and improving productivity.
This book is perfect for those who want to reducedistractions and increase the effectiveness of their work. It helps them develop the ability to work deeply and manage time better.
After reading this book, you might start exploring the world of cryptocurrencies. Through this work, Cal Newport provides very effectivetips for studying and delving into the most complex topics of our time. What could be better than this innovative sector where various disciplines mix, mainly computer science and economics?
“Atomic Habits” offers a detailed guide on how to build positive habits and eradicate negative ones through small daily changes. Clear uses scientific research and personal stories to illustrate how habits shape our lives. This book is essential for those who want to improve gradually and achieve lasting results, offering simple and practical strategies that can lead to significant changes in their lives.
“The Power of Now” by Eckhart Tolle
“The Power of Now” is a classic in all bookstores in the self-improvement section. It teaches the importance of living in the present to achieve inner peace and happiness.
Tolle combines elements of philosophy and psychology, offering a practical guide to living a more mindful and fulfilling life. Through the book, Tolle helps readers free themselves from the chains of the past and worries about the future, focusing on the only moment that truly matters: the present.
“Your Erroneous Zones” by Wayne W. Dyer
“Your Erroneous Zones” is a fundamental book for those who want to free themselves from self-limiting thoughts and behaviours. Wayne W. Dyer offers practical strategies to identify and overcome “erroneous zones,” or those ways of thinking that prevent achieving full personal fulfilment. This book invites you to take control of your life and live it more authentically and freely.
“The 7 Habits of Highly Effective People” by Stephen R. Covey
This book is a comprehensive guide to improving personal and professional effectiveness through seven fundamental habits. Covey provides tools and strategies to develop a balanced and productive life, making it a must-read for anyone who wants to improve their time management and leadership skills.
“Designing Your Life: How to Build a Well-Lived, Joyful Life” by Bill Burnett and Dave Evans
Bill Burnett and Dave Evans, professors at Stanford University, present an innovative approach to designing a fulfilling life using design thinking principles.
“Designing Your Life” offers practical tools for fully exploring your passions, overcoming obstacles, and building a rewarding career and life. This book is ideal for those seeking a structured method for tackling important life decisions with creativity and confidence.
“Think and Grow Rich” by Napoleon Hill
A classic of motivational literature, “Think and Grow Rich” explores the fundamental principles of financial and personal success. Hill analyses the habits and philosophies of great businessmen and suggests to readers how to apply them in their daily lives to achieve ambitious goals.
Based on decades of research, this book offers practical strategies for achieving success.
“Tools of Titans” by Tim Ferriss
“Tools of Titans” is a collection of advice and strategies from some of the world’s most brilliant and successful people, gathered and commented on by Tim Ferriss.
The book covers many topics, including health and professionallife, offering practicalinsights and the right inspiration to improve your lifestyle. Ferriss distils information from over 200 interviews with world-renowned athletes, entrepreneurs, and artists, making this book a treasure trove of valuable knowledge.
“The Elephant in the Brain” by Kevin Simler and Robin Hanson
“The Elephant in the Brain” analyses the unconscious motivations that drive our behaviour. The authors argue that many of our actions are guided by hidden motivations we do not know. This book offers a fascinating perspective on how the human mind works and how our true motivations influence our daily behaviour.
“Principles: Life and Work” by Ray Dalio
Ray Dalio, one of the world’s most renowned investors and entrepreneurs, shares the principles guiding his life and career. The book is a collection of lessons on how to face personal and professional challenges with wisdom and integrity, offering valuable teachings on leadership, risk management, and innovation. Dalio presents a structured approach to life and work based on clear and tested principles, whichcan help anyone improve their decision-making skills and succeed.
These books represent some of the best resources available for those looking to improve themselves and succeed in various life aspects. Each offers practical tools and strategies that can be immediately applied to begin one’s journey of personal growth.
How will the cost of variable-rate mortgages vary in the coming months? To predict this, it is necessary to analyse the central forecasts on Euribor, the European reference interest rate.
What the latest forecasts tell us about the Euribor, or Euro Interbank Offered Rate, which is the average interest rate paid by banks in the eurozone to lend money to each other and the benchmark for variable-rate mortgages.
In recent months, Euribor forecasts, particularly three-month ones, have attracted the attention of many financial industry experts, who have analysed various factors to predict future fluctuations. What is the current Euribor forecast for the last months of 2024?
Euribor forecasts: what will happen in the short term?
The first actor to provide its Euribor forecast is, as one would hope, the European Union, through the ‘Spring 2024 Economic Forecast’, a report analysing, in a broad sense, the economic situation in Europe.
The executive summary of the document provides an overview highlighting the most important data for the Union, such as the Gross Domestic Product (GDP) growth rate and the inflation rate. It also includes some forecasts on Euribor and the factors that will influence it.
Of course, the future of the Euribor is closely linked to the decisions of the European Central Bank (ECB) regarding interest rates. These were alreadyreduced by 25 basis points in June and currently stand at 4.25%. According to the Union, these will reach the threshold of 3.2% by the end of the year and 2.5% by the end of 2025.
Chatham Financial expects Euribor to decrease to 3% by early 2025 and 2.7% by the end of next year.
Erste Group, one of the leading financial institutions in Central and Eastern Europe, has a slightly more optimistic Euribor forecast. After the first interest rate cut in June, the lending institution expects Euribor to reach 3% by the end of the year and 2.6% by July 2025.
Most banks and credit institutions’ forecasts for the last months of 2025 are similar. They all expect the three-month Euribor to fall, possibly dropping below 3% after next summer. This suggests easing the ECB‘s restrictive monetary policies in response to lower inflation.
The impact on variable-rate mortgages
Why are Euribor forecasts important for those who have taken out a variable-rate mortgage or intend to do so shortly? Because the mortgage cost varies precisely according to the fluctuations of this value. Therefore, a decrease in Euribor would reduce the monthly mortgage instalments, thus enabling holders of variable-rate mortgages to save money.
In short, the Euribor forecasts suggest that a favourable market phase for variable-rate mortgages is ahead of us after a few years of very steep repayments! As mentioned in the previous paragraphs, this trend is closely linked to ECB policies and global economic conditions. This information is crucial for borrowers to plan their finances better and consider possible switches to fixed-rate mortgages if more stability is desired.
The update of the P&L (Profit and Loss) feature on Young Platform is designed to provide you with a clear and detailed view of your cryptocurrency portfolio’s performance. This article will explain all the features that make the P&L function an essential tool for monitoring and analysing your profits and losses.
What is the Profit and Loss feature?
The P&L feature is the barometer of your cryptocurrency portfolio. It intuitively displays the wallet’s overall performance, from realised gains to potential ones. This helps you make more informed decisions, setting orders based on data presented in simple pie charts, saving you time.
Profit and Loss is located within the Analytics section. Thanks to a convenient menu, you can quickly view data and charts by clicking icons. Let’s examine all the new sections.
Total yield is the core of the Profit and Loss feature. It shows you the total sum of your profits and losses in percentage and monetary terms (€). This function considers all value changes in your crypto, thus both realised and unrealised gains and losses.
By “unrealised”, we mean the counter value of the cryptocurrencies you own but have not yet converted into euros. Only when you sell them does that profit or loss become “realised”. The values shown here are net of fees.
If you have only deposited fiat without placing orders, the values reported here will be zero. However, if you have deposited crypto, profits or losses will be recorded as the price fluctuates.
The breakdown by categories, in the section immediately below, shows how your capital is distributed among different strategies: Spot, Moneyboxes, and Smart Trades. In this case, it is the total latent profit of your cryptos. At a glance, you know which strategy is yielding the best results.
Volume Analysis
Monitor your portfolio’s volumes by following deposits, withdrawals, and purchase, sale, and exchange orders. For complete control over your operations, you can select the month and transaction category you wish to view in the chart.
Crypto Allocation
The cryptocurrency distribution chart shows the percentage breakdown of your portfolio among the different cryptocurrenciesheld. Each chart segment represents a specific cryptocurrency, highlighting its proportion relative to the total portfolio. This lets you quickly see which cryptocurrencies make up the most significant part of your overall portfolio and evaluate whether to add or shift capital based on those generating a gain or a loss.
Transactions
Summarises the total transaction volumes. This summary is useful for evaluating a potential upgrade to a higher identity verification level or enrolling in a Club that offers fee discounts tailored to our needs.
Balance Distribution
The balance distribution chart, across different strategies, shows how your portfolio’s capital is allocated among various strategies. Each chart segment represents a specific strategy, highlighting its proportion relative to the total balance. This lets you quickly see which strategies constitute the most significant part of your portfolio, facilitating the analysis and management of diversification, risk, and returns associated with each strategy.
Portfolio Diversification
The chart shows the division of your capital among euros, cryptocurrencies, and stablecoins. Each chart segment represents one of these categories, highlighting their proportion relative to the total portfolio. Cryptocurrencies are subject to volatility and can vary significantly in value, while stablecoins tend to have a stable value as they are pegged to a fiat currency or a physical asset like gold.
Definitions and Examples
Focusing on some key terms is necessary to better understand actual profits and losses or whether the decisions made have proved successful generally.
Unrealised Gain
Unrealised gain (or loss) indicates the growth or decline in the value of the cryptocurrencies in the portfolio, calculated on the difference between the purchase or deposit price and their current value. If sold or converted, such gain (or loss) becomes “realised” net of fees.
Example:
You buy 0.5 BTC at 15,000 EUR (30,000 EUR per 1 BTC).
The current value of 0.5 BTC is 17,500 EUR (35,000 EUR per 1 BTC).
The total gain or loss generated by the portfolio through sales or conversion transactions is calculated based on the purchase and sale prices of the cryptocurrencies at the time of the operations. Transaction fees are included in the calculation as a loss.
Example:
You buy 0.5 BTC at 15,000 EUR (30,000 EUR per 1 BTC).
You sell 0.5 BTC at 17,500 EUR (35,000 EUR per 1 BTC).
The purchase price represents the actual cost of buying a cryptocurrency, including only those bought through Young Platform and not those deposited or withdrawn from/to external wallets.
Example:
You buy 0.4 BTC at 12,000 EUR (30,000 EUR per 1 BTC).
You have already deposited 0.3 BTC in your wallet at 9,600 EUR (32,000 EUR per 1 BTC) (this is not included in the purchase price calculation).
Purchase price considered only for BTC purchased on Young Platform = 30,000 EUR per 1 BTC.
Average Price
A LIFO (Last In, First Out) methodology calculates the average purchase price. It is assumed that the units sold or withdrawn are the last ones bought or deposited, with variations in the average price of the assets with each transaction.
Example:
Case 1: only purchases
You buy 0.3 BTC at 9,000 EUR (30,000 EUR per 1 BTC).
You buy 0.2 BTC at 7,000 EUR (35,000 EUR per 1 BTC).
Initial average price = (9,000 EUR + 7,000 EUR) ÷ 0.5 BTC = 32,000 EUR per 1 BTC.
Case 2: sale (LIFO method calculation)
You sell 0.3 BTC.
BTC sold at 35,000 EUR per 1 BTC (0.2 BTC = 7,000 EUR) and part at 30,000 EUR per BTC (0.1 BTC = 3,000 EUR).
The remaining average price after the sale = (9,000 EUR – 3,000 EUR) / 0.2 BTC = 30,000 EUR per BTC.
Case 3: new purchases
You buy 0.4 BTC at 16,000 EUR (40,000 EUR per BTC).
Updated average price = (6,000 EUR + 16,000 EUR) / 0.6 BTC = 36,667 EUR per BTC.
Case 4: subsequent sale
You sell 0.3 BTC.
BTC sold at 40,000 EUR per BTC (0.3 BTC = 12,000 EUR).
Remaining average price = (6,000 EUR + 4,000 EUR) / 0.3 BTC = 33,333 EUR per BTC.
Case 5: deposits and withdrawals
You deposit 0.3 BTC at 9,600 EUR (32,000 EUR per BTC).
Updated average price = (6,000 EUR + 9,600 EUR) / 0.6 BTC = 26,000 EUR per BTC.
You withdraw 0.3 BTC.
BTC withdrawn at 32,000 EUR per BTC (0.3 BTC = 9,600 EUR).
The remaining average price = (6,000 EUR) / 0.3 BTC = 20,000 EUR per BTC.
Conclusion
With the update of the Profit and Loss feature on Young Platform, monitoring and analysing the performance of your cryptocurrencies is simpler and more accessible. The interactive charts allow you to keep a clear and intuitive view of your gains and losses. Whether you are a beginner or an expert in the crypto world, this new feature will help you better manage your portfolio and make more informed decisions.
