Mortgage base rates rise in January for first time in 17 months
12-month Euribor – the rate used for most mortgages in Spain – came in at -0.189 in January, compared to -0.19 in December, a percentage increase of 0.5% (but 99% lower than the same month last year).
As a result, borrowers in Spain with annually resetting Spanish mortgages will see their mortgage payments fall by around €5 per month for a typical €120,000 loan with a 20 year term.
This is the first time Euribor has risen on a monthly basis since August 2016, and might announce the change a the trend that has been downward in 2008, with Euribor in negative territory since the start of 2016. When mortgage interest rates finally rise to normal levels, many borrowers in Spain will find themselves in financial difficulty.
New mortgage lending contracts in November
After six consecutive months of increases, new residential mortgage lending fell an annualised 3.7% in November to 24,882 loans, according to the National Institute of Statistics. Even so, the value of new mortgage lending rose due to an increase in the average loan up 10.7% to €122,703. The average interest rate for mortgages signed in November was 2.71%, a percentage decrease 14.3% compared to the same month last year.
This post first appeared on: Property Insights