Euribor to Record Low in August

September 1st, 2009

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell to a record low of 1.334 percent in August, down from 1.41 percent in July. Euribor is now 75 percent lower than it was this time last year, when it stood at 5.323 percent, leading to significant savings for mortgage borrowers on annually resetting mortgages.

After the fall in August, Euribor has now fallen for eleven consecutive months, setting a new record low in each of the last 6 months. Euribor has gone from record high to record low in the space of a year. However, mortgage experts do not expect Euribor to drop much further from here, certainly not below 1 percent.

Thanks to the latest drop in Euribor, the average borrower can expect to save around 316 Euros per month, or more than 3,800 Euros per year, on mortgages that reset around now. But consumer groups have complained that many banks are not passing on falling rates to customers, using the opportunity to raise the margins they charge borrowers.

Nevertheless, Spanish consumer group CECU has urged borrowers to use the fall in base rates to try and remortgage, noting that the number of people doing so is up nearly 65 percent compared to last year. CECU has also called on borrowers to report banks for including illegal clauses in mortgage contracts.

Related posts:

  1. Euribor at Second Lowest Level on Record
  2. Euribor At Lowest Level On Record
  3. Euribor To New Record Low In November
  4. Euribor Falls to New Record Low
  5. Latest Euribor and Spanish Mortgage News

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