Euro mortgage base rates are still heading down, whilst new mortgage lending is heading up.
12-month Euribor – the rate used to calculate most mortgage repayments in Spain – fell to a new historic low of 0.154% in September, a percentage decline of 4.3% in a month, and 57.5% in a year, reducing monthly mortgage repayments for many borrowers in Spain.
Monthly repayments on annually resetting mortgages will fall between 2% and 3%, meaning savings of around €20 a month, or €240 a year less on a loan of €200,000 with 24 years left to run.
MORTGAGE LENDING UP
New mortgage lending was up 27% year-on-year in July, according to data from the General Council of Notaries, taking the number of sales involving mortgage financing to 46% – the highest level since the the boom years in the middle of the previous decade. New mortgage lending is the fuel that drives the property market.
OUTSTANDING MORTGAGES DOWN
The value of all outstanding mortgage loans was €692 billion in July, 5.7% down in a year, say the Spanish Mortgage Association (AHE). So whilst new mortgage lending is growing fast, the overall value of outstanding mortgages is declining as mortgages are paid down or written off.