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Mortgage interest rate continue steep climb

12-month Euribor, the rate normally used to calculate mortgage interest rates in Spain, continued its steep climb in October, and has now risen for 10 consecutive months, pushing up borrowing costs in the process.

Euribor turned positive in April after 74 months in the red (since January 2016) and finished October on 2.629%

As you can see from the chart above Euribor has climbed more steeply this year than at any time in the quarter of a century since it was first published at the end of 1998, and is now at the highest level it has been since December 2008.

As a result of the latest increase a typical 20-year variable-rate mortgage of €120,000 resetting in November will incur higher monthly mortgage repayments of around €172 at a time when borrowers are already feeling the pinch from consumer price inflation.

Euribor is being driven up by the European Central Bank’s attempts to dampen inflation, which hit 10.7% in the Euro-area this October

Experts expect Euribor to rise to between 2.8% and 3.0% by year end, with some forecasts as high as 3.5%.