Mortgage base rates in the Eurozone dropped to another record low in December 2017, whilst the latest data shows new mortgage lending rising for another month in October.
12-month Euribor – the rate used for most mortgages in Spain – came in at -0.19 in December, compared to -0.189 in November, a percentage difference of -0.5% (and 137.5% compared to the same month last year).
As a result, borrowers in Spain with annually resetting Spanish mortgages will see their mortgage payments fall by around €6 per month for a typical €120,000 loan with a 20 year term.
Euribor was in negative territory and fell every single month last year. There seems to be no end to this upside down world of negative interest rates, but of course it must end one day, and when that day comes many borrowers will be in trouble.
New residential mortgage lending rose 8.2% (yoy) in October to 24,706 new loans, according to the National Institute of Statistics. The average new loan value was up 9.6% to €120,628, and the average interest rate was 2.67%.