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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Latest interest rates and mortgage news from Spain and the Islands

January 2, 2010 – 12:21 pm
The latest news from Spain and Tenerife's Euribor and mortgage situation

The latest news from Spain and Tenerife's Euribor and mortgage situation

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 and if you have a good relationship with your estate agent, they will be able to point you in the right direction, particularly in Tenerife for the best deals available.

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European property prices to improve?

August 14, 2009 – 2:51 pm
European property prices set to improve?

European property prices set to improve?

Property prices across Europe are expected to fall at a slower rate as the economy starts to level out, according to a report released by Invista Real Estate Investment Management. Conditions for the economy in the eurozone during the first half of this year were the worst since it was formed, although signs are that things are starting to improve.

The European Central Bank reports that more European banks have increased their lending, while the cost of borrowing has fallen sharply. The report says that improving property yields could increase the long-term attractiveness of  investing in property.

Tim Francis, director, Continental European strategy and research at Invista, says: “With improved visibility on bottom-of-the-cycle valuations, we are in a better position to judge market pricing against fair value. This will assist in identifying attractive investment opportunities across these markets, some of which are experiencing distressed selling.”  We expect deal flow to improve during H2 2009 as the other mature continental European markets including Spain and Tenerife catch up.

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Spanish loans on the increase.

August 8, 2009 – 10:13 pm
Loans increas in Tenerife and Spain as property prices are more affordable

Loans increase in Tenerife and Spain as property prices become more affordable

The number of new Spanish property mortgages approved in May rose by 15per cent to 57,614 compared to the previous month, indicating that demand for property in Spain and Tenerife is rising, according to Spain’s National Institute of Statistics.

However, on an annual basis the volume of mortgages issued in May fell 23per cent, compared to the corresponding month last year.

The average mortgage value in May fell 14per cent to €121,120 (£102,560) year-on-year, but rose 5per cent month-on-month potentially reflecting the fact that cheaper properties in Spain and Tenerife are now available.

Overall new mortgage lending was €7bn, down 33per cent year-on-year, but 20per cent higher than April.

The average interest rate agreed for new mortgages in May was 4.6per cent, 11per cent lower in percentage terms than a year ago, and 2.2per cent lower than the previous month.

The majority – 96per cent – of all Spanish mortgages secured were on a variable rate, with the other 4per cent fixed.

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