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Euribor driving up mortgage costs

A summary of the Latest Euribor and Spanish mortgage news

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, rose to 2.147pc in May, the highest it has been since January 2009.

On an annualised basis, Euribor is 72pc higher than it was a year ago, meaning higher monthly repayments for borrowers with mortgages resetting now.

Repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.25) will go up by around 64 Euros /month, or 775 Euros / year. That will punish many a stretched household budget in Spain.

Other mortgage news

New mortgage registrations collapsed 20pc YOY in March to 43,176, according to the National Institute of Statistics (INE). The average mortgage value fell by 3.8pc.

Overall new mortgage lending fell 20pc to 4.8 billion Euros.

Some experts are saying that the only way out of this mess is a further reduction in house prices.

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