The Euribor rate continues to fall this year, albeit not quite as dramatically as in previous years, and it means that property owners will reduce their monthly mortgage interest repayments.
Most Spanish mortgages are based on the base rate of the 12-month Euribor. In April 2018 this stood at -0.191, which is a 59.7% fall on the same month in 2017. The April figure is important because this is the month when mortgages are reset annually.
The Euribor has been on a downward spiral since the global financial crisis in 2008. It got a short-lived, shot in the arm in 2011, but since then it has been remarkably low. In recent months it has been more static with no notable further decline.
What does this mean for Spanish mortgage payers?
If you have a Spanish mortgage that is reset annually, you can expect to see the monthly payment fall by round €3.6 on a €120,000 mortgage repayable over 20 years, according to Spanish Property Insight. It also suggests that articles in the Spanish press are quoting financial analysts as saying that they do not expect the Euribor will not fall any further and that “some monetary sanity has return to the Eurozone soon.” It looks like that days is approaching.
When you look at a 10-year chart for the Eurozone, you can see that money has never been so cheap here. Mark Stücklin, who is an expert on Spanish property prices, claims that now is the time to look for a long-term, fixed interest rate mortgage, because it will never be this good again, at least not in the next 20 – 30 years.
It is also the case that Spanish property prices are rising again, which is another reason to look for that dream property now and to get the mortgage arranged while the Euribor remains at this low level.
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