The Eurozone base rate Euribor rose a fraction in July, from a historic low the month before, but mortgage repayments will still go down for most borrowers with mortgages resetting now.
12-month Euribor rose from 0.163 in June to 0.166 in July, a monthly percentage change of +1.8%, but a fall of 66% compared to the same month last year.
That is the first time Euribor has risen since April last year, though after such a small rise Euribor remains just above the historic low reached in June.
The 66% annualised decline in Euribor means that borrowers with mortgages resetting now will say monthly repayments fall. For example, a borrower with a mortgage of €200,000 and a 24-year term will see monthly payments fall by 33 euro per month, or 400 euro per year.
Base rates are so low that mortgage borrowing has never been this cheap for those who can get a mortgage, namely borrowers with attractive credit profiles. July’s factional increase in Euribor will not change this, though at some point in the next few years Euribor will have to rise to a more normal level. That could cause distress for borrowers banking on permanently low rates.
NEW MORTGAGE LENDING RISES
Meanwhile data from the National Institute of Statistics (INE) for june shows that new mortgage lending volume rose by 10.9% in May, to 19,732 new loans. Year to date in May new mortgage lending volume was up 20.1%, and new mortgage lending has risen for 12 consecutive months.