Another month, another record low for Euribor, but new mortgage lending hit a wall in February, after seven consecutive months of strong growth.
12-month Euribor – the rate used to calculate most mortgage repayments in Spain – came in at -0.119 in March, down from -0.11 in March, and the fourteenth consecutive month of negative Euribor interest rates.
As a result, borrowers in Spain with an annually resetting Spanish mortgage will see their mortgage payments fall by around €6 per month for a typical €120,000 loan with a 20 year term.
The Research division of Spanish bank BBVA forecast that Euribor will stabilise this year, and start rising next year. If they are right we will soon see the end of monthly declines in Euribor, which is now deep in negative territory. Get a fixed rate mortgage close to historic lows whilst you still can.
NEW MORTGAGE LENDING FALLS IN FEBRUARY
The latest data from the National Institute of Statistics shows that new mortgage lending fell 2.7% in February (yoy) to 24,342 new loans. Mortgage lending had been on a roll, with seven consecutive months of growth to January, so this sudden fall comes as a surprise. It’s too early to tell if it is the start of something or just a one-off.
The average residential loan value rose in February, up by 7.2% to €115,883. The average interest rate was 3.17%, down from 3.29% last year, and the average term was 24 years. 38% of new loans had a fixed interest rate, 62% were variable rate mortgages.