Mortgages become cheaper as Euribor falls to lowest in history at 0.25 per cent
Friday, November 8, 2013 @ 6:45 PM
INTEREST rates in the Eurozone have gone down by another quarter of a percent to a record low of 0.25, further reducing monthly mortgage payments for Spain's homeowners.
European Central Bank chairman Mario Draghi says the decision was to stimulate credit flow and increase consumer spending.
As well as mortgages going down, the reduction in the Euribor means credit card, car finance and loan repayments – both personal and business – will be cheaper across the Eurozone, and exporters will have a greater profit margin, bringing more money into the countries which use the common currency.
Economists say this reduction is not particularly drastic, since in 2011 the Euribor went down below one per cent for the first time – from nearly 5.5 per cent in 2007 – because there is very little margin left to decrease it.
And it will not be a miracle cure, say experts, nor generate noticeable or quick results, since growth remains very weak across the Eurozone, something which continues to be a great risk and a huge hurdle for the region's financial future.
Additionally, even though personal loans, business finance and mortgages will cost less for the end consumer, banks are likely to continue to be reluctant to lend money – except in rare circumstances, the possibilities of obtaining credit at the moment are very limited, economists claim.
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