The latest Spanish mortgage and Euribor news

Euribor (12 months), the interest rate most often used to calculate mortgage repayments in Spain, fell to 1.06 in July, the lowest level on record, as illustrated by the chart above.

As a consequence of the latest fall in Euribor, borrowers who have already taken out 40-year mortgages could see their montly repayments fall by as much as 17pc. New borrowers, however, will not benefit as much, if at all, because banks are dramatically increasing their spreads on new loans.

The following table from analysis by Idealista.com, a Spanish property portal, shows how much monthly payments will fall for mortgages resetting annually and every six months. The first column on the left gives the numbers of years remaining on the mortgage, the middle column gives the percentage fall in monthly payments for mortgages that reset every six months, and the right-hand column gives the same figure for annually resetting mortgages.

Another month, another drop in new mortgage lending

Meanwhile, new mortgage lending, a key indicator of the health of the property market, plunged year-on-year another 30.5pc in May (to 26,007), according to stats from Statistics Institute (INE). Year-to-date (5 months), new mortgage lending is down 39.4pc by volume, 45.4pc by value, and the average new mortgage value is down by 10pc. New mortgage lending has now fallen for 25 consecutive months, partly because of a credit crunch, and partly because of weak demand.