Decreasing Euribor

For those of you with mortgages in Spain, I thought you could you a bit of good news. The Euribor, the rate normally used to calculate mortgages in Spain, has fallen drastically to its lowest rate ever! It currently stands at 1.909%. So many of you who have been feeling over the last year should soon start to see a substantial dorp in repayments.

To give you a better idea, if you have a mortgage of 150,000€ on your property over a period of 25 years, you should see a drop of around 2,000€ per annum and around 5,000€ per annum if you have a mortgage of 300,000€ over 25 years.
Looking at this in the most positive light, with easier repayments, there should be fewer distressed properties on the market and there will be fewer repossessions as people will be able to meet their mortgage repayments.

Looking at it in a more negative light though, we will have to see if the banks and saving banks actually pass on these benefits to the clients. If you go to bank right know they are not offering mortgages at 2 or 3 percent but at 5 and 6 percent which is not too much of a surprise. The banks are trying to re-build their balance sheets and what better way than by trying to increase their profit margin on mortgage loans? Many banks are also still unwilling to offer mortgages over 50% except in a few cases where higher percentages are available.

Regards
Andrew Belles

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2 Responses to “Decreasing Euribor”

  1. Andrew says:

    As a small update.

    My bank has confirmed that next month (yearly renewal) my mortgage will be dropping from 5,59% to 3,25%. Happy days!

    So I can at least say that in my case the banks are passing on the savings.

  2. Polaris World says:

    For the Polaris World properties we sell and doubtless available elsewhere in Spain, we have seen this month a mortgage from HBOS at Euribor +1.4%. It’s interest only for 5 years but they take the monthly euribor. At the moment monthly euribor is just under 0.5% so you have a mortgage rate of around 1.9%!

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