Spanish mortgages fall again as Euribor drops to 0.18%
Tuesday, May 5, 2015 @ 12:30 PM
MORTGAGES in Spain are set to get cheaper yet again now the Eurozone interest rate has plummeted still further.
The Euribor at the close of April stood at 0.18%, its lowest in history, having been as high as 5.3% towards the end of 2007.
Given that the majority of mortgages in Spain are variable rate loans which are revalued annually, this means a typical homeowner will save about €284 a year.
Fixed-rate mortgages in Spain do exist, but borrowers rarely ask for them since they attract an additional fee and any fluctuation is annual only, meaning they have plenty of time to prepare and take action if interest rates do begin to rise sharply.
This has not happened in eight years and, in fact, a mortgage of approximately €90,000 over a 35-year term at the beginning of 2007 would have cost in region of €500 a month, but by the beginning of 2015, would have gone down to around €288 a month.
April started off with the Euribor at 0.196%, and it gradually fell throughout the month reaching 0.171% on the last day.
Economists say it is 'a long way below' the 0.6% seen in the same period last year, although in practice in the case of the aforementioned €90,000 loan, the difference in monthly repayments year-on-year is in region of €12.
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