12-month Euribor, the base rate used for most mortgages in Spain, came in at -0.181 in June, a slight increase on the previous month, and the first time since 2013 that Euribor has risen for four months in a row.

Euribor in June was 3.7% higher than May, but still 3 basis points below the same month last year. As a result, borrowers in Spain with annually resetting Spanish mortgages will see their mortgage payments fall by around €1.64 per month for a typical €120,000 loan with a 20 year term.

As the next chart shows, the multi-year decline in Euribor appears to have run its course, and looks to be bottoming out before starting the long climb back to normal levels.

Interest rates used to be between 3% and 5% in the decade leading up to the financial crisis, and the crisis itself was partly caused by leaving interest rates too low for too long. Keep that in mind as you consider what the next crash might be like.

New Spanish mortgage lending up 22% in April

New residential mortgage lending increased in April by 22%, a big rebound compared to March, when the growth rate of just 2% was the result of seasonality. The average new loan in April was €133,456, down 3.3% compared to last year. 47.3% of purchases involved mortgage financing, with an average LTV of 75.2%, all according to data from the Association of Spanish Notaries.

Whilst new mortgage lending keeps growing, there will be more money chasing properties in Spain. In hot markets like Madrid, Barcelona, and the Balearics, this will put upward pressure on prices.