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Mortgage rates steady whilst lending continues to plunge

Spanish mortgage Euribor rates

Euribor was almost unchanged in October for the second month in a row, whilst new mortgage approvals went through the floor in August.

Euribor (12 months) ended October on an average of 0.541pc, down a fraction on the 0.543pc average of September, and 16.8pc lower than the same time last year.

That means that annually resetting mortgages with no minimum rate clause will see monthly repayments fall by an average of 11 Euros / month, or 132 Euros / year.

As one can see from the chart above showing its annualised change, Euribor has clearly bottomed out and is back on the rise. The interest rates cycle appears to have turned, though nothing is certain in the new world of quantitative easing.

Another plunge in new mortgage approvals

It doesn’t really matter what happens to Euribor when there are no mortgages to be had anyway. New mortgage lending collapsed another 42pc in August, compared to the same time last year, according to the latest figures from the National Institute of Statistics (INE).

As I’ve written almost every month for the last few years, less money chasing a growing housing inventory means average prices can only go down.

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