Euribor (12 months), the interest rate mainly used to calculate mortgage repayments in Spain, rose to 0.57pc in January, a percentage change of +3.8pc on the previous month. That’s the first time Euribor has risen on a monthly basis since October 2011.
But, on an annualised basis, Euribor is still 69pc lower than it was a year ago, meaning lower monthly repayments for borrowers with variable-rate mortgages.
For example, repayments on a 24-year mortgage of €200,000 would go down by around €212/month, or €1,450/year.
New borrowers, however, should not get excited, as the banks are increasing their margins (the spread, or difference they charge on top of the base rate). The average mortgage lending rate in November was 4.39pc, according to the INE. The average spread has gone up to 2.73pc.
Were base rates to go up to 5pc – a rate that is historically quite normal – as they did in 2008, then new borrowers today would be paying an interest rate of around 8pc. Food for thought for new borrowers.
No recovery without more mortgage lending
Meanwhile, new residential mortgage lending fell 31.6pc in volume, and 34.3pc in value in November, compared to the same time the previous year. The average new mortgage value fell 4pc to €105,216. There won’t be any recovery in the housing market that isn’t preceded by a recovery in mortgage lending.