Euribor, the rate normally used to calculate mortgage payments in Spain, fell from 2.622% in January to 2.1% last month (a change of -18.6%), suggesting that borrowers on annually resetting Spanish mortgages may start to benefit from smaller mortgage repayments.
This is the lowest Euribor rate since June 2005, and almost 50% lower than year ago, when it stood at 4.349%.
Assuming that lower rates are passed on by the banks, the average borrower should see their monthly mortgage repayments fall. Monthly repayments on a typical annually-resetting mortgage (150,000 Euros, 25 years, Euribor + 0.5%) should fall by 200 Euros a month – a saving of 2,400 Euros a year.
Some borrowers have complained, however, that falling base rates are not translating into lower mortgage rates, as banks pocket the difference. Some people have even reported that their mortgage rates have gone up.