Mortgage Bank rate

I have a mortgage with Banco de Andalucia (the buiders mortgage) my first year was 3.75% a one year special rate and last year it was just under 5.75% based on (REFER. INTERBANCARIA A 1 AÑO (EURIBOR) POR B.E.  + 1,00 (116 ))

i.e. the one year euribor rate plus 1%

I am expecting it to go down as the Euribor rate has come down. I have only paid 10 installments at the 5.75% rate so it may not come down until after 12 payments. I have shown a 12 month rate table below.

As you can see below the rate was 4.733% in 2008  and now its about 3%.

Has anybody seen this happen yet?

Jeff

I too am with BA and my rate went to 6.75ish in October and will not reduce until next October. Euribor has now dropped 2.5 points since then so i am out of pocket at the moment by 2.5points.

Interestingly the Euro has not weakenned as the pound did when rates were reduced in UK

Jeff

My situation is very similar to yours in that I am with BA and the initial special rate was 3.75%.  That went up to 5.75 in the last review in Feb 08.  My next review / anniversary is 1 Feb 09 so I will find out shortly.

fingers crossed

Steve

Thanks for replies my review date is Feb 2009 so we shall see.

It looks like timing can be both good and bad for you, but not at the same time.

 I think you may be disappointed.

 I was under exactly the same impression as you but I have just had my mortgage with BA reviewed, that was on 4^th December 2008. My next review will be same date 2009.

 My agreed mortgage is based on Euribor + 1.25%.

 My new rate has gone up from 5.85% to 6.5%! ie. 5.25% (Euribor) + 1.25%.

 As far as I can work it out, the 12 month Euribor rate has been used to calculate my new basic mortgage rate. It is then rounded up or down, most probably up! I think that the rate that is used is the average of the last twelve Euribor 12 month rates (moving average?).The extra1.25% is then added.

 If anyone’s interested please see euribor.org or the euribor-rates.eu websites.

Let me know if I’ve got it wrong. Failing that BA have pulled a fast one.

There have been a number of postings on the general EOS forums on the subject of mortgage rate re-set (annual) it will be worth searching for them.

this blog on EOS reports that most banks use the 3 month Euribor rate.

It might be worth writing to the bank for an explanation.  I for one would be interested in the reply if you would care to share it.

Paul

I just thought I would let everyone know, to give you some idea of what to expect, that our mortgage is with Banco Andalucia and the interest rate has just had its annual review today and went down from 5.75% to 4.5%.   it's basically euribor+1.00% with an annual review taking a 12 month historic view of the actual rate.  Some banks review the rate annually but only take a view of the rate over the last three months so these may come in even lower but it can work the other way when rates start to rise again.  The exact product is "REFER. INTERBANCARIA A 1 AÑO (EURIBOR) POR B.E.  + 1,00 (116 )"

All we need now is for the pound to strengthen against the euro and fingers x for that

I don't know if anyone else has noticed it but the rates I am getting on exchange are getting a slight bit worse as well.  I won't name names but I have been very happy with the currency company I was using and you would expect the actual rate I got to be about 2% less than the published rate.  Then over the last couple of months it went to 2.5 and then they tried 3% until I had a chat with them and now its back at about 2% again.

Steve

Thanks for that info, Steve.  Our review is up this month, so good news!!

Thanks Steve.

My mortgage is reviewed in May so hopefully it will be similar at least.

As regards currency rates I've registered with two brokers.  It you always accept their quote without quibble they start to up their margin.

That's just business and the dealer on the phone may get themselves moew commission.    So best to make sure that

a) you don't leave it too late before making a trade

b) register with more than one agent

c) routinely get quotes fromb both and switch agents even if they match their rates

Hi,

I am with BoA and and my rate seems to have done the same,  payment yesterday was taken at  5.75% and my review was yesterday and the new rate for next payment looks to be 4.5% see below

Frequency:	Mensual	Frequency:	Mensual	4,500% nominal  MIXTO
Modality:	Cuota fija	Modality:	Vencida

However yesterdays rate was

so I will go and see them so they can explain how they used the rate. I am in Spain mid Feb for 3 weeks.

The annual 12 month graph can be seen at http://www.euribor-rates.eu/euribor-charts.asp 

My rate was set last October at 6.62...however when it is reset at next October it should be down to about 3.5 as according to the graphs the average looks like it will be around there

John,

I have just a 12 month euribor average from 1st Nov 2007 to 1st October 2008 and the average is 4.931 so your rate should not have gone above 5.93

They must have used the rate on the day i.e. 5.3, if thats the case my rate should be closer to 3.5 not 4.5.

I think they use an average, thats why we need to find out their calculation method.

Here is the rate table so people can do their own calculations. These are the monthly 12 months euribor rates.

Thanks Jeff..it is a bit of a dark art the mortgage business i must say.

They set mine in October so looks like they used 1/10/08 rate..the bloody top of the rises...just my look.

Incidentally I will be over for the management meeting with you. 

All,

Just to point out when anticipating your mortgage reductions  beward of collars.

 If you are with Banco de Andalucia and you took either the Developers Mortgage or the standard alternative from them in 2006/7  then note that both

of these mortgages operate with a collar.  i.e..  there is a minimum mortgage interest rates below which these will not fall.

The Developers mortgage has a collar  of 3.75%  (amd is calculated as Euribor +1.25%)

The alternative BdeA mortgage (that was favoured by some as it had zero fee for early repayment and based on Euribor +1%) has a collar of 4%.

So those with the Developers mortgage might soon find themselves paying less rates for a couple of years.

Paul

Paul,

I took the altenative mortgage where I paid slightly more on entry but I get Euribor plus 1% and no exit fees.

My logic was that if rates went very much below 4% I would go and negotiate with BoA on the basis I would try and get a mortgage somewhere else if they did not agree a lower rate.

My logic was based on mortgage money being freely available.........so that theory is out of the window for now?

However looking on the internet some bank seem to be offering mortgages of 70%.

The problem with swapping mortgage lenders is the cost ...probably at least 5% of loan value

I thought the fee would be about 1-1.5%.

However if the bank thought they were losing your mortgage and current account to another bank they may be willing to keep you and give a lower rate on the mortgage. They make money on your current account in fees and interest and insurance costs.

Just received my bank statements today from Banco de Andulucia.

In the mortgage bit was a list of the next 12 payments showing the new interest at 4.5% for each payment.

So they have made it lower but I would have expected a rate closer to 4%, I intend to go into the bank and find out why.

Lending criteria is toughening up worldwide, Spain is no different 70%ltv is still perfectly possible as for remortgaging elsewhere a remortgage product does not actually exist in Spain and as someone earlier on posted it does cost around 4-4.8% so there is little to gain, unlike the UK where for exampe you purchased for £100k it is now worth a £1m and you can remortgage for £750k  they dont apply that scenario in Spain which probably is the reason that their banks share prices are still growing whilst thos ein the UK are crashing!

Although we provide mortgages in both countries it would appear the best bet at present is to remortgage in the UK , take advantage of the small gain in currency exchange and pay of the mortgage in spain.

Good idea but if one did pay off the mortgage in Spain and remortgage in the UK does the benefit as far as inheritance tax still apply? i.e. you only liability is on the bit you own not the full amount.