Mortgage rates rise again as mortgage lending plunges

A summary of the Latest Euribor and Spanish mortgage news

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, rose to 2.183pc in July, a percentage change of +1.8pc on the previous month.

On an annualised basis, Euribor is now 59pc higher than it was a year ago, meaning higher monthly repayments for borrowers with variable-rate mortgages.

Repayments for a typical mortgage (150,000 Euros, 25 years) will go up by around 60 Euros /month, or 700 Euros / year, bad news for many a stretched household budget in Spain.

Mortgage lending tanks

New mortgage lending rose 20pc in May, but was still 32pc lower than a year before, as you can see from the following charts:

And overall mortgage lending is declining at a rate never seen before, or at least not sine records began in 1992. You can see how 2011 has evolved in red, a far cry from 2008 in blue.

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About Mark Stücklin

Mark Stücklin is a Barcelona-based property market analyst and consultant, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008). He can be reached by email on ms@spanishpropertyinsight.com.