Forecasts that 12-month Euribor, the interest rate normally used to calculate mortgage payments in Spain, would to start drifting downwards in the second half of the year have proved to be wide of the mark. After falling slightly in August, September’s financial smash-up in the credit and equity markets made Euribor – the rate at which banks lend to each other – turn around and bolt upwards sharply. It finished September at 5.384%, just short of its all time high of 5.393% in July.

After the latest rise, Euribor is now 13.9%% higher than it was a year ago, which means more pain for borrowers with variable rate mortgages that reset this month.

Monthly repayments on a typical annually-resetting, variable-rate mortgage of 150,000 Euros at 25 years with a rate of Euribor plus 1% will rise by around 60 Euros.