This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Another month, another fall in Eurozone base rates, reducing borrowing costs in Spain.
12-month Euribor – the rate used to calculate most mortgage repayments in Spain – fell to yet another historic low of 0.079 in November, a percentage decline of 38% in a month, and 76% in a year, reducing monthly mortgage repayments for many borrowers in Spain.
A typical borrower with an annually resetting 20-year mortgage of €120,000 will see mortgage payments fall by €13.45 per month, adding up to a saving of €161 per year.
Euribor has been below 1% since June 2012, but Euro interest rates were not always so low. Back in July 2008 they peaked at 5.393%, and in the decades before Spain joined the Euro, interest rates above 10% were common.
Eurozone interest rates are being driven down by the quantitative easing programme of the ECB, which is buying around €60 billion a month of public and private debt to try and stimulate the economy and inflation. The market expects this programme to continue, or even increase, setting the scene for even lower rates in future.
With interest rates so low, some incredible fixed-rate deals are available below 3%, but Spanish borrowers largely ignore the lower risk of fixed rate deals for the cheaper repayments of variable rates in the short term. This fact could come back to haunt the Spanish housing market when interest rates start to rise, as they eventually must.
Guillermo Kerber says:
Looking for a holiday apartment to buy for some years and now happy owner in Baix’ Emporda your articles and analysis have been very helpful Mr Stuecklin. Thanks a lot.
G. Kerber & family
Mark Stücklin says:
Guillermo, thank you for your kind words and I’m happy you have found this website useful. Congratulations on your purchase in the Empordà. It’s a wonderful part of the world.
Martin Sinclair says:
Hi Mark
I echo Gillermo’s sentiment above, very helpful articles and commentary, much appreciated.
Regarding mortgage rates, are you able to shed any light on which banks are offering attractive fixed rates? (particularly to foreign buyers, EU citizens but resident outside of the EU) On a recent trip to Madrid we had meetings with several banks (BBVA, Ibercaja, La Caixa, Santander, Sabadell) and approached several others, but were only ever offered variable rate mortgages.
Are fixed rates only available to residents? Have we missed something?
Sincerely
Martin
Mark Stücklin says:
Martin, fixed rate mortgages are also available to non-residents. I’m surprised you were not offered one by the banks you talked to. If you send me an email to ms@spanishpropertyinsight.com I’ll put you in touch with someone at La Caixa who might be able to help you.
Stewart says:
Beware of “floor clauses” in your mortgage deeds. Spanish Banks are infamous for this. They are being taken to court daily but are still squirming out of things. A friend of mine sued his bank, eventually winning the case after 3 years of appeals only for the bank to recompense back 12 months.