Mortgage costs in Tenerife and Spain reduce making property purchases more affordable
Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell to an all time record low of 1.41% in July, down from the previous record low of 1.61% in May. Euribor is now 73.8% lower than it was this time last year, when it hit a high of 5.393%, leading to significant savings for mortgage borrowers on annually resetting mortgages.
The latest figures from the National Institute of Statistics (INE) reveal that mortgage activity is still significantly down on last year, but may have turned a corner in May as key figures started to improve on a monthly basis.
The number of new residential mortgages signed in May fell by 23% to 57,614 compared to the same month last year, but rose by 15% on a monthly basis.
The average mortgage value in May fell 14% to 121,120 Euros year on year, but rose 5% month on month.
Overall new mortgage lending was 7 billion Euros, 33% less than a year before, but 20% higher than April.
The average interest rate agreed for new mortgages in May was 4.6%, 11% lower in percentage terms than a year ago, and 2.2% lower than the preceding month.
96% were variable rate mortgages, the remainder fixed rate
