Euribor, the rate normally used to calculate mortgage payments in Spain, fell to 5.258% in October, the lowest rate since May.

The fall in Euribor will not bring relief to most Spanish mortgage borrowers on annually resetting mortgages, as Euribor is still 13% higher now than it was a year ago. A typical borrower with an annually resetting 150,000 Euro mortgage at 30 years with a rate of Euribor +0.5% will see their monthly repayments rise by 57 Euros, or 685 Euros per year.

Now that central banks have intervened so drastically to reduce the affects of the credit crunch, Euribor appears to be on a downward trend. Jean Claude Trichet, president of the European Central Bank, has also made it clear that base rates are likely to be cut this week, putting further downward pressure on Euribor.