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Euribor keeps falling whilst mortgage rates keep rising

The latest Spanish mortgage and Euribor news

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell to 1.266 in April, 41pc lower than the same time last year (chart above).

As a result, repayments on a typical 25-year, €150,000-mortgage resetting now will go down by around €750/year.

But cheaper mortgage rates only apply to those who already have mortgages. Those that don’t either can’t get a mortgage (unless buying a bank repo) or have to pay much higher rates.

The following chart shows the spread between Euribor and new mortgage lending interest rates. The dark line shows Euribor (going down), the light green line shows average mortgage interest rates charged by lenders (going up) and the olive green line shows the difference between the two, which is basically the margin charged by lenders (going up).

New mortgage lending plunges

New mortgage lending in March collapsed 42pc year-on-year, to 25,000 approvals, and 6pc compared to the previous month (NIE). The average new mortgage value fell an annualised 8pc to €103,783, all of which means less money chasing homes, and downward pressure on house prices.

Back in the boom years it was common for there to be more than 120,000 new mortgages a month, so the mortgage market is down around 80pc.

Monthly new mortgage lending over 10 years:

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