Mortgage base rates in the Eurozone dropped to another record low in June 2017, whilst the latest data shows new mortgage lending in April slumped for the first time in months.
12-month Euribor – the rate used to calculate the majority of mortgage interest payments in Spain – came in at -0.149 in June, compared to -0.028 a year ago, a percentage difference of 17.3%.
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.
New Spanish mortgage lending slumps in April 2017
New residential mortgage lending slumped by 11.4% in April having risen 20.2% in March, show the latest figures from the National Institute of Statistics (INE).
New mortgage lending has been rising strongly in recent years, with double digit annualised increases in most months since the start of 2014. New mortgage lending has declined in just three months since May 2014, as illustrated by this chart.
Rising new mortgage lending is one of the factors driving a housing market recovery in many coastal areas and cities, so a sustained downturn in new lending would harmful to that process.
However, there is no obvious reason to expect new mortgage lending to go into reverse. It’s more likely that April was a temporary decline, and that the growth trend will resume in the coming months.
Despite the decline in the number of new mortgages signed in April compared to the previous year, the average new mortgage loan value rose 5.4% to €112,834, and the average interest rate rose to 3.24% compared to 3.2% the previous year.
