Monthly Mortgage Payments Rise
Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, has now risen for 5 consecutive months to its highest level in more than a year.
Euribor reached 1.421% in August, an increase of 3.5% on the previous month, and 6.5% higher than August last year.
As a result, borrowers on annually resetting mortgages will have to start paying more. Repayments on a typical annually resetting mortgage (150,000 Euros, 25 years) will rise by around 6 Euros/month, or 70 Euros/year, to around 594 Euros/month.
This is the first time that Euribor has risen on an annualised basis since October 2008, when the credit crunch first griped the markets. Interest rates then tumbled as central banks poured money into the banking system. Rates are now starting to rise as investors fret about a fiscal deficits and inflation.
Story by Mark Stucklin
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