Eurozone mortgage base rates hit a record low in October, the ninth consecutive month of negative rates.
12-month Euribor – the rate used to calculate most mortgage repayments in Spain – came in at -0.069 in October, down from -0.057 in September, and the ninth consecutive month of negative Euribor interest rates.
Compared to October last year, when Euribor was 0.128, the benchmark interest rate for Eurozone mortgages was down by 154%.
As a result, borrowers in Spain with an annually resetting Spanish mortgage will see their mortgage payments fall by around €10 per month for a typical €120,000 loan with a 20 year term.
Let me just point out, as I have to every month, that negative base rates are a crazy situation, but also a golden opportunity for investors to buy Spanish property near the bottom of the market with a long-term fixed interest loan at a time when borrowing money is probably as cheap as it is ever going to get. If there was ever a good time to invest in Spanish property, this is probably it, though not all properties are likely to make a good investment. As ever, it all depends what and where.
NEW MORTGAGE LENDING UP IN AUGUST
New mortgage lending to home buyers (20,609) was up 6.4% in August compared to the same month last year, show the latest figures from the INE. So new lending returned to growth after falling 15% in July, when a problem with abusive clauses meant that many new loans could not be inscribed in the Land Register. The increase in mortgage lending shows rising confidence of both banks and consumers towards property. The average new loan value was €110,121, up 4.8% compared to last year.