All the latest Euribor and Spanish mortgage news for December 2013.

Euribor (12 months) finished December with a monthly average of 0.543pc, up 7pc on September, but 1.1pc lower than the same time last year.

With Euribor almost the same as it was 12 months ago borrowers with annually resetting mortgages will see monthly repayments fall by a negligible amount, three or four Euros a month at best.

Euribor is still near the record low of 0.484pc it plumbed in May 2013, but looks firmly on a tightening trending, as illustrated by the chart above.

However, with the ECB likely to keep monetary conditions loose for the immediate future the tightening should remain modest. That said, any tightening is bad news for over-stretched Spanish borrowers and the domestic housing market.

New mortgage lending

Looking at new mortgage lending, tightening rates couldn’t come at a worse time. New mortgage lending fell another 23.2pc over twelve months to the end of October, according to the National Institute of Statistics (INE).

New mortgage lending is the lowest it has been since records began, and is down around 75pc from its boom-time peak, as you can see from this chart:

The domestic housing market will not recover until new mortgage lending starts growing again, so this is a key figure to watch. With its foreign cash-buyers, the market for holiday-homes on the coast is less dependent on new mortgage lending, but of course the markets are related on some level.

Here is another shocking chart, showing the alarming rise in the household bad debt ratio in the second and third quarter of last year.

The bad debt ratio of households surged to over 6pc in Q3, and mortgage defaults made up the lion’s share. Having clung on for as long as they could, more households than ever are defaulting as their savings dry up. Clearly the human drama of this economic crisis is far from over.