Euribor rate falls

April 3, 2012 – 11:29 am

Spain's Euribor rate falls, causing mortgage costs to fall in Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell to 1.45pc in March, leaving it 25pc lower than the same time last year. As a result, repayments on a typical 25-year, €120,000-mortgage resetting now will go down by around €25/month or €300/year.

Mortgage rates are plunging because of the new policy by the European Central Bank (ECB) to provide banks with unlimited funding for 3 years. None of this means cheap credit for mortgage borrowers.  When banks can only get short-term (3-year) financing, they avoid lending to house-buyers for 25 years.

Partly as a consequence, new mortgage lending in Spain has collapsed, down in January an annualised 41pc by volume, and 47pc by value, with the average mortgage value down 10pc.  It’s clear Spain is back in a credit crunch.

So mortgage rates have plunged, but so has new lending. The result is less money available to buy housing, which means downward pressure on prices.

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Euribor down,mortgages cheaper?

March 5, 2012 – 12:16 pm

Euribor falls again in Spain and Tenerife

Euribor,(12 months), the interest rate typically used to calculate mortgage repayments in Spain, fell to 1.678pc in February, leaving it 2.1pc lower than the same time last year. This is the first time that annualised Euribor has turned negative in 19 months. As a result, repayments on the average 25-year, €150,000-mortgage resetting now will go down by around €36/year.

This time last year Euribor was still rising fast as the European Central Bank (ECB) tightened monetary conditions. The Euribor has been on a downward trend since August last year and shows no sign of changing direction, 

Rates will stay low whilst the ECB keeps up it’s unlimited lending policy, giving banks 3-year financing in return for dubious collateral. Unfortunately, this does not mean cheap credit for mortgage borrowers. Quite the opposite. When banks can only get short-term (3 year) financing, they avoid lending to house-buyers for 25 years.

Partly as a consequence, new mortgage lending in Spain has collapsed, down 32.6pc in 2011 (to 409,337)  the biggest annual fall since the crisis began  according to figures from the National Statistics Institute (INE). The overall value of new mortgage lending fell 35.5pc to €45.8 billion, and the average mortgage loan fell 4.3pc to €111,950, at an average interest rate of 4.35pc, up 11.54pc on 2010.

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Euribor rate falls for fourth month in a row

January 4, 2012 – 11:40 am

Euribor down again which means mortgage repayments up in Spain and Tenerife

Euribor, (12 months), the interest rate typically used to calculate mortgage repayments in Spain, fell for the fourth month in a row to end the year at 2.01, a percentage fall of 1.7pc on the previous month. Compared to the 12 months ago, however, Euribor rose by 33.4pc, meaning higher mortgage repayments for all those on annually resetting mortgages.

The European Central Bank (ECB) cut base rates from 1.25 to 1.00 during December, the second cut in 2 months since the Italian Mario Draghi took over as the new Governor. Markets were expecting the cut, and judging by Euribor’s recent trend do not expect rates to increase any time soon. As you can see from the following chart, Eurozone base rates are still significantly higher then the US, the UK, and Japan.

New mortgage lending continued to shrink in October, with new mortgage approvals down 43pc to 23,193 (and down 46.5pc by value), according to figures from the INE. It’s clear the credit crunch is well and truly back in Spain.

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Euribor Rate

December 5, 2011 – 10:58 am

Euribor down again which means mortgage repayments up in Spain and Tenerife

Euribor(12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell for the third month in a row to 2.044pc in November, a percentage fall of -3.1pc on the previous month.

After rising abruptly in the first quarter of the year, Euribor has been stable or declining since May in expectation of a cut in the base rate.

Mario Draghi, the new Governor of the European Central Bank (ECB), announced a cut in base rates of a quarter of a point to 1.25% just a few days after taking over from Trichet at the beginning of November. In the face of alarming economic headwinds, markets expect the ECB to cut the base rate even further, hence the fall in Euribor.

When the Euribor goes  down, mortgage payments  go up.The fall in Euribor will not be much immediate comfort for those with an annually resetting mortgage. Euribor is now 33pc higher than it was 12 months ago, meaning repayments on the average mortgage will rise by 400 Euros/year.

The Credit Crunch is back in Spain with a vengeance. New mortgage lending fell 42pc in September year-on-year (to 30,808), and the average value fell 6pc to €111,934, according to figures from the Statistics Institute (INE). Lower mortgage lending = less money chasing homes , downward pressure on prices and more bad news for vendors.

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Euribor rate rises

November 9, 2011 – 10:52 am

Euribor rates rises again in Spain and Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, rose to 2.11pc in October , a percentage increase of 2.1pc on the previous month.

Over 12 months Euribor was up 41.1pc, which means higher monthly mortgage payments for those with annually resetting Spanish mortgages. Average mortgage repayments will rise by around €45/month, €540/year

New mortgage lending is the lifeblood of the housing market without which most Spaniards cannot afford to buy homes. So it is particularly worrying that new lending fell 49pc in August compared to a year before, the lowest level on record for this data series published by the Statistics Institute (INE). New mortgage lending has now fallen for 16 consecutive months, suggesting that the credit crunch is still alive and well in Spain.

The average new mortgage value in August was €106,922, 12.6pc lower than a year before.

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Euribor down a fraction in August

September 14, 2011 – 9:42 am

Euribor falls a fraction affecting mortgages in Tenerife and Spain

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell a fraction to 2.097pc in August, a percentage fall of -3.9pc on the previous month.

The rise of Euribor seems to have peaked, at least for the time being. With markets fretting about a European debt crisis, expectations of rising interest rates have fallen, taking the heat off Euribor rates.

On an annualised basis, however, Euribor is still 48pc higher than it was a year ago, meaning higher monthly repayments for borrowers with variable-rate mortgages.

Repayments for a typical mortgage (150,000 Euros, 25 years) will go up by around 48 Euros /month, or 582 Euros / year, bad news for many a stretched household budget in Spain.

New mortgage lending collapsed 42pc in June (to 32,680 new mortgage approvals) compared to a year before, the 14th consecutive month of annualised falls, and one of the lowest levels on record.

The average new mortgage value signed in June was 109,431 Euros, down 8pc compared to June last year, with an average interest rate of 4.12pc, up 4.8pc on last year.

All of which means less money around to fuel demand for Spanish property, putting further downward pressure on prices.

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Euribor rate falls a fraction in June

July 5, 2011 – 10:00 am

Euribor rate falls . Properties in Tenerife and Spain will cost more if mortgage rates are set now

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell a fraction to 2.144pc in June, a percentage change of just -0.1pc on the previous month.

On an annualised basis, Euribor is now 67pc higher than it was a year ago, meaning higher monthly repayments for borrowers with mortgages resetting now.

Repayments for a typical mortgage (150,000 Euros, 25 years) will go up by around 61 Euros /month, or 741 Euros / year. That will punish many a stretched household budget in Spain.

In other mortgage news, new mortgage registrations dived an astonishing 38pc YOY in April to 31,358,, according to the National Institute of Statistics (INE). The average mortgage value fell by 3.8pc. That came on top of a 20pc fall in March. Lending is at all-time lows, which is bad news for the housing market.

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Spanish mortgage rates rise again

March 7, 2011 – 9:41 am

Spanish mortgages rise again.

Euribor (12 months), the interest rate generally used to calculate mortgage repayments in Spain, rose to 1.714pc in February, from 1.55pc in January, a monthly change of +10.6pc. On an annualised basis, Euribor is 39.9pc higher than it was a year ago, 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 35 Euros /month, or 400 Euros / year. That will punish many stretched household budgets in Spain.

The final figures for 2010 show new mortgage lending fell by an annualised 7.4pc in 2010 (volume), the 4th year in a row of declining lending. On the positive side the decline has slowed down compared to the fall of 22pc in 2009 and 32pc in 2008.

Overall lending was down 7.8pc in value terms, with the average residential loan value last year at 116,860 Euros, down 0.8pc compared to 2009. The average new mortgage interest rate was 3.87pc, down from 4.59pc in 2009.

There are many bargains around in Tenerife and the Canary Islands due to the state of the world’s economy. A reliable estate agent will be able to lead you to good value property  and also the best deals  on the mortgage front.

By Angela | Posted in Economy, General, Holiday, Inspirational, Property, Tenerife, Things to Do | Tagged , , , , , , , , | Comments (0)

Euribor rate falls

January 7, 2011 – 10:04 am

Spain's Euribor rate falls

Euribor (12 months), the interest rate mainly used to calculate mortgage repayments in Spain, fell to 1.507pc in December, from 1.541pc in November (-2.2pc). On an annualised basis, Euribor  changed by 21pc compared to the end of last year. That means higher monthly repayments for borrowers with mortgages resetting now.

As a result of the latest increase, repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.5) will go up by 20 Euros /month, or 240 Euros / year.

The big news of the month was October’s collapse in new mortgage lending, which fell by an annualised 24pc (to 39,542), and by 25pc compared to September, according to figures from the INE

This is the sixth month in a row that new mortgage lending has fallen, a clear sign of trouble for the market. New mortgage lending has been falling since July, and the latest fall comes on top of a slump of 16pc in September.

The average residential loan value in October was 111,368 Euros, down 2.7pc over 12 months and down a startling 6.8pc compared to September. Significantly fewer, smaller loans means a lot less money chasing property, putting further pressure on prices.

Total new residential mortgage lending in October was 4.403 billion Euros, down 26.4pc in a year. The average new mortgage interest rate was 3.74pc, down 10.7% in a year but up 0.3% in a month.

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Spanish property owners see mortgage repayments rise

September 14, 2010 – 4:26 pm

Mortgages repayments in Tenerife on the rise

Spanish homeowners are likely to see their mortgage payments rise over the coming months after the nation’s benchmark rate for loans, Euribor, rose 1.42 per cent in August, which could lead to more distressed properties coming to the market.

The rise marked the first increase in loan rates since October 2008 and is likely to squeeze Spanish homeowners further as almost nine out of every ten new Spanish mortgages are floating rate, reports Business Week.

Repossession orders in the nation already jumped to 27,621 in the first quarter, from 23,433 a year earlier and this upward trend is likely to continue.”You can’t expect Euribor to stay at the current low levels for ever and what really matters now is the rate of ascent,” Raj Badiani, an economist at IHS Global Insight in London, told the news provider.

The troubled real estate market in Spain and the Canary Islands could provide an opportunity for property investors hoping to find a home in Tenerife or find propertyfor rent or sale in Tenerife or the Canary Islands for a bargain price.

From the highly interesting Property Showrooms site

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , | Comments (0)