October 9th, 2009

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 5.5% in September to a new record low of 1.261%. Euribor has now fallen for 12 consecutive months, and is 77% lower than it was a year ago.

Monthly repayments on the average annually-resetting mortgage (150,000 Euros, 30 years, Euribor +0.85%) will drop by around 435 Euros a month, or 4,150 Euros a year, to 555 Euros/month. However, many borrowers will not benefit thanks to clauses in their contracts that set a floor for interest rates.

There were 58,995 new residential mortgages signed in July, 19% less than a year ago, according to figures from the INE. In the first 7 months of the year new mortgages were down 30% compared to the same period last year.

The fall in new residential mortgages appears to be bottoming out (year-to-date in May -35%, -31% in June, and -30% in July). In value terms, new mortgage lending fell 34% to 6.7 billion Euros in July, or 41% in the first 7 months of the year.

Related posts:

1. Euribor up for second month
2. Euribor Falls Again To New Low
3. Euribor Falls to New Low of 1.644 Percent
4. Euribor To New Record Low In November
5. Euribor At Lowest Level On Record

Tags: Euribor, Interest Rates

This entry was posted on Friday, October 9th, 2009 at 13:24 and is filed under Financial & Mortgages. You can follow any responses to this entry through the RSS 2.0 feed.

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