Posts Tagged ‘Euribor’

 

May 6th, 2011

Euribor (12 months), the interest rate generally used to calculate mortgage repayments in Spain, rose to 2.086 in April, a change of +8.4% compared to the previous month, and the first time Euribor has been above 2% since February 2009.

On an annualised basis, Euribor is 70.3% higher than it was a year ago (see graph above), meaning higher monthly repayments for borrowers with mortgages resetting now.

Repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.25) will go up by around 64 Euros per month, or 775 Euros per year. That will punish many a stretched household budget in Spain.

Interest rates over the last 20 years

Where will rates go from here? Upwards, most likely. The chart above, from property portal Idealisa.com, plots interest rates over the last 20 years. As you can see, we are in a period of exceptionally low interest rates (that are probably incubating the next crisis).

Story by Mark Stucklin

Tags: , ,
Posted in Financial & Mortgages | Comments Off

June 9th, 2010

Euribor 12 months, the interest rate predominantly used to calculate mortgage payments in Spain, rose 2% in May compared to the previous month, taking it up to 1.249%, the highest level it has been since last September. This is the first time since July 2008 that Euribor has risen for 2 consecutive months.

Despite rising for 2 months, Euribor is still not far above the record low of 1.215 it hit in March. It is still 24% 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 to around €510/month, saving 24 Euros a month, or 288 Euros a year. If Euribor keeps rising, it won’t be long now before borrowers starting seeing their monthly payments increase, albeit modestly at first.

Euribor is an interbank lending rate based on interest rates set by the European Central Bank (ECB). Base rates are currently at 1% but the ECB is expected to put them up during the course of 2010. Even though base rates haven’t yet been touched, Euribor is starting to rise as banks get nervous about the state of the economy and lending to each other.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off

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.

Tags: , ,
Posted in Financial & Mortgages | Comments Off

April 5th, 2010

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 0.8% in March compared to the previous month, finishing at 1.215%. Once again, Euribor is at the lowest level on record, down 36% in 12 months, and 77% down from its all time high of 5.393% in July 2008. Thanks to the latest reduction in Euribor, repayments on a typical annually resetting mortgage (120,000 Euros, 25 years, Euribor +0.8%) will fall by around 41 Euros a month, or 500 Euros a year.

When Euribor rose a fraction in December I suggested that, after 14 consecutive months of falls, a change of trend might be in the offing. Despite a return to declines in January, February, and March, that still probably holds true. Flipping around is often consistent with a period of change.

Most of the savings from the fall in Euribor have already been had, and Euribor is unlikely to go much lower. Next month borrowers on annually resetting mortgages will hardly notice any savings, even if Euribor goes a bit lower. Euribor is based on interest rates set by the European Central Bank. Base rates are expected to remain at 1% for the first quarter of 2010, rising gradually after that.

New mortgage approvals rose 2.3% to 53,747 in January compared to the same month last year, after an annualised fall of 1.3% in December, showing there is not yet a clear trend towards improvement. On a monthly basis, new mortgage lending was up 12.3% in January. The average mortgage value was 112,839 in January, 7.6% lower than January 2009. Overall new lending was down 5.5% to 6.064 billion Euros.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off

March 17th, 2010

The report from Savills International Research revealed how far the overseas property market in the UK had fallen over the last year. Just 2% of the 430,000 foreign-home owners in the UK bought their property in 2009, compared to 70% who bought between 2003 and 2008.

“By spring 2009 Savills International noted that interest in international holiday homes had returned, albeit at far lower levels than previous years,” said the report. “The market has now reverted back to traditional, end-user buyers (as opposed to investors), and mostly in traditional, established hotspots.”

The high number of distressed sales that have contributed to oversupply and falling prices has helped keep pure investors out of the market, it added. “In contrast to previous years, investors solely seeking to capitalise on upward price movement are no longer active in the market place.”

Savills’ head of international, Charles Weston-Baker, told OPP that mid-market buyers had also started to return to the market. “We have started to see more grassroots sales coming through,” he said. “The very top of the market has largely been unaffected, but now end-users who are looking for lower-priced but quality property are buying to enjoy the product.

“We’ve also noticed how important sport has become to buyers, especially for baby boomers and those retiring. There’s a new enthusiasm for experiential holidays and buyers need a reason to be somewhere, such as golf or horseriding. We seem to have jumped 20 years in aging, where people are slowing down at 80 rather than 60.”

The report predicts another quiet year for the UK holiday home market, with most sales taking place to high-income lifestyle buyers in traditional locations, with little activity in the speculative or off-plan markets.

The proportion of people buying in major cities and in villages grew substantially at the expense of smaller towns and isolated rural locations. The popularity of purpose-built resorts also increased.

“This reflects not only the growth in preference for such developments but also the rise in quality and quantity of such communities,” said the report. Interest in buying property to renovate or improve also fell, mirroring the rise in resorts where ready-to-go homes maximise letting potential.

Savills’ market has become skewed towards mid-to-top end buyers, and properties worth more than £200,000 now form the majority of purchases, with a particular fall in popularity of homes worth less than £100,000.

Story from OPP (registration)

Tags: , , ,
Posted in Property market | Comments Off

March 10th, 2010

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 0.6% in February compared to the previous month. Euribor now stands at 1.225%, the lowest level on record. Euribor is 43% down over 12 months, and 77% down from its all time high of 5.393% in July 2008.

As a consequence of the latest reduction in Euribor, repayments on a typical annually resetting mortgage (150,000 euros, 25 years, Euribor +0.75%) will fall by around 65 Euros a month, or 780 euros a year.

When Euribor rose a fraction in December I suggested that, after 14 consecutive months of falls, a change of trend might be in the offing. Despite a return to declines in January and February, that still probably holds true. Flipping around is often consistent with a period of change.

Most of the savings from the fall in Euribor have already been had, and Euribor is unlikely to go much lower. By March borrowers on annually resetting mortgages will hardly notice any savings, even if Euribor goes a bit lower.

Euribor is based on interest rates set by the European Central Bank. Base rates are expected to remain at 1% for the first quarter of 2010, rising gradually after that.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off

February 8th, 2010

According to data released today by the National Statistics Institute (INE), the number of home mortgages issued during November 2009 was 52,043, representing a growth of 1.8 percent over the same month in 2008 and the first recorded rise since April 2007.

The volume of loan capital amounted to 6010.5 million, 10.1% less than the same month in 2008, which means that the average amount borrowed fell by 11.7% to 115,492 euros. Despite the rebound year in November, the cumulative comparison of January and November 2009 to the same period in 2008 showed an overall decrease of 23.2%.

Savings banks granted the most mortgages (52.2%), followed by banks (36.6%) and other financial institutions (10.9%). As for borrowed capital, savings banks granted 45.3% of the total, banks provided 43.0% and other financial institutions contributed 11.7%.

The average interest rate of savings banks was 4.25% and the average term was 23 years, while in banks, the average rate was 4.03% and the average term was 21 years. The variable interest mortgage remains the preferred option in 95.2% of mortgages, compared with only 4.8% opting for fixed rate. The Euribor was reported as the reference rate that was used in 88.7% of the mortgages.

The data also shows that in November, 40,156 mortgages had their conditions changed, 35.3 percent more than last year – 32,379 of these were changes in the conditions of a mortgage with the same institution (42.4% higher), mostly being attributed to mortgage payers taking advantage of lower interest rates and longer terms.

Tags: ,
Posted in Financial & Mortgages | Comments Off

February 5th, 2010

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 0.8% in January compared to the previous month. It now stands at 1.232%, the second lowest level on record.

Last month I reported that Euribor rose a fraction in December, suggesting that, after 14 consecutive months of falls, a change of trend might be in the offing. Despite a return to declines in January, that is still probably the case. Flipping around is often consistent with a period of change.

After January’s fall, Euribor is now 53% lower than it was a year ago. That means borrowers on annually resetting mortgages can expect some relief in their mortgage payments. As a consequence of the latest reduction in Euribor, repayments on a typical mortgage (150,000 Euros, 25 years, Euribor +0.75%) will fall by around 100 Euros a month, or 1,200 Euros a year.

Most of the savings from the fall in Euribor have already been had, and Euribor is unlikely to go much lower. By March borrowers on annually resetting mortgages will hardly notice any savings, even if Euribor goes a bit lower.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off

January 5th, 2010

Euribor 12 months, the interest rate normally used to calculate mortgage payments in Spain, rose 0.9% in December compared to the previous month, finishing the year at 1.242%. This was the first monthly rise in Euribor in 14 months, suggesting that a change in tendency is on the way. But despite the increase in December, Euribor is still 64% lower than it was 12 months ago. That means borrowers on annually resetting mortgages can expect some relief in their future mortgage payments. Euribor is based on interest rates set by the European Central Bank. Base rates are expected to remain at 1% for the first quarter of 2010, rising gradually after that.

The volume of new residential mortgages signed in October was 52,451, down 18% compared to the same month last year, and 16% compared to September, according to the latest figures from the INE. In value terms new residential mortgages were down 31% to 6 billion Euros. New mortgage signings in Spain have now fallen for 28 consecutive months, often by double digits. That illustrates the severity of Spain’s property crash, even if official figures disguise the extent to which property prices have fallen. The average new mortgage value also fell, by 15.8% to 113,882 Euros.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off

December 13th, 2009

Euribor 12 months, the interest rate normally used to calculate mortgage payments in Spain, fell 1 % in November to a new record low of 1.231 %. Euribor has now fallen for 14 consecutive months, and is 72 % lower than it was a year ago. As a consequence of the latest reduction in Euribor, repayments on a typical annually-resetting mortgage (140,000 euros, 25 years, Euribor + 0.5 %) will fall by around 240 Euros a month, or 2,800 euros a year.

Economic analysts expect Euribor to stay around current low levels in the months to come. Both Jean Claude Trichet, president of the ECB and Miguel Ángel Fernández Ordóñez, governor of the Bank of Spain, have said that current base rates are at the “appropriate level”.

The volume of new residential mortgages signed in September was 62,411, down 4.2 % compared to the same month last year. In value terms new residential mortgages were down 16 % to 7.3 billion euros.
The good news is the decline in new mortgage lending has been bottoming out in the last few months. It fell 31 % in June, 19 % in July, 7 % in August, and 4 % in September. If the trend continues new mortgage lending will soon be growing again year-on-year in volume terms. That will give some support to the housing market.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off