A summary of the Latest Euribor and Spanish mortgage news
Euribor (12 months), the interest rate typically used to calculate mortgage repayments in Spain, fell for the forth month in a row to end the year at 2.01, a percentage fall of 1.7pc on the previous month.
Compared to the 12 months ago, however, Euribor rose by 33.4pc, meaning higher mortgage repayments for all those on annually resetting mortgages.
Base rates cut
The European Central Bank (ECB) cut base rates from 1.25 to 1.00 during December, the second cut in 2 months since the Italian Mario Draghi took over as the new Governor. Markets were expecting the cut, and judging by Euribor’s recent trend do not expect rates to increase any time soon. As you can see from the following chart, Eurozone base rates are still significantly higher then the US, the UK, and Japan.
New motgage lending continues shrinking
New mortgage lending continued to shrink in October, with new mortgage approvals down 43pc to 23,193 (and down 46.5pc by value), according to figures from the INE. It’s clear the credit crunch is well and truly back in Spain, as you can see from the following chart showing the annualised change in new mortgage approvals.