Euribor (12 months) – the interest rate normally used to calculate mortgage payments in Spain – rose to 5.361% in June, the highest level since the Euro was introduced.

Euribor has now risen for 5 consecutive months, and is now 18.2% higher than it was a year ago. Compared to June 2004, when it dropped to its historic low of 2.103%, Euribor is now 156% higher, which is to say it is more than one and a half times greater.

The latest rise in Euribor will push up mortgage repayments on variable, annually-resetting mortgages taken out last year by close to 900 Euros per year.

The only good news for borrowers in Spain is that the market’s do not expect Euribor to rise further this year. Experts forecast that Euribor will close the year in the 5.10% to 5.15% range.

Fewer, smaller mortgages

The latest figures from Spain’s National Institute of Statistics (INE) reveal that the number of new mortgages sold in May fell by 36% compared to last year.

The average mortgage value also fell, by 6.6% to 140,861 Euros. Overall mortgage lending (number of loans x average value) fell by 40.3% compared to May 2007.

Average mortgage repayments in May rose by 11 Euros to 823 Euros a month.

The average mortgage interest rate was 5.18%, more than 10% higher than a year earlier.

97% of all mortgage were variable rate, and just 3% fixed rate.