3 September 2009
Euribor, the interest rate normally used to calculate mortgage payments in Spain, fell to a record low of 1.334% in August, down from 1.41% in July, reports Spanish Property Insight.
Euribor is now 75% lower than it was this time last year, when it stood at 5.323%, leading to significant savings Spain property owners with a mortgage.
The cost of financing the purchase of a property in Spain has been falling month-on-month for almost a year, with the Euribor having depreciated for eleven consecutive months, setting a new record low in each of the last six months. Euribor has gone from record high to record low in the space of a year.
Thanks to the latest drop in Euribor, the average owner of a property in Spain with a mortgage can expect to save around €316 (£276) per month, or more than €3,800 (£3,230) per year, on mortgages that reset around now.
However, there is evidence to suggest that most banks are not passing on falling rates to customers, opting to raise margins instead.
Mortgage experts do not expect Euribor to drop much further from here, certainly not below 1%.
See Also: Spain (67), Marc Da-Silva (269), Mortgage (25)
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