Euribor Rises, New Mortgages Up

May 12th, 2010

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, rose 0.8% in April compared to the previous month, taking it back to 1.225% where it was in February. This is only the second time Euribor has risen on a monthly basis since September 2008.

Despite the rise in April, Euribor is still just a fraction above the record low it hit in March. It is still 31% lower than it was a year ago, and 77% lower than it was in July 2008. Because Euribor is still lower than it was a year ago, repayments on a typical annually resetting mortgage (120,000 Euros, 25 years, Euribor +0.8%) will fall by around 41 Euros a month, or 420 Euros a year.

Many experts think that Euribor has fallen as far as it can and expect rates to start rising modestly. It won’t be long now before borrowers starting seeing their monthly payments rise, albeit a small amount. Euribor is based on interest rates set by the European Central Bank. Base rates are currently at 1% but are expected to rise gradually during the course of 2010.

New mortgage lending rose 8.5% in February compared to the same month last year, according to figures from the National Institute of Statistics (INE). That is the second consecutive month of growth in mortgage lending, a good sign for the market. On a monthly basis there were 54,813 new mortgages signed in February, up 6.2% compared to January.

The average loan value was 118,185 Euros, a fall of 4.6% compared to last year. Overall new mortgage lending was 6.478 billion Euros, up 3.5% on last year. The average interest rate was 3.97, 26.5% below a year ago, and 2% lower than January.

Related posts:

  1. Euribor At Lowest Level On Record
  2. Euribor Falls Again To New Low
  3. Euribor Above 2% for First Time in 2 Years
  4. Euribor up for second month
  5. Euribor at Second Lowest Level on Record

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