Low Euribor ensures higher demand for mortgages in Spain
The coronavirus continues to keep the real estate market in Spain on tenterhooks. The European key interest rate Euribor, which is primarily used for the variable-rate mortgages that are popular there, fell to a new historic low of minus 0.48 percent last November - the fourth time since the outbreak of the Covid-19 pandemic this year. Experts believe that there is still no end in sight to the fall in key interest rates.
But what does the current Euribor development look like for mortgage borrowers in Spain in practice? For example, anyone with a mortgage with a term of 20 years and a variable interest rate of Euribor + 1 percent per year has been paying more than 130 euros less (calculated over the whole year) since November 2020 than in October. Major Spanish banks such as „Bankinter“ and „Caixabank“ expect that the Euribor index, which is currently favorable for mortgage borrowers, could remain so for the next ten years.
„It is expected that the repayment rates of variable rate mortgages linked to Euribor will continue to fall until the end of this year“, explained Simone Colombelli, head of the Spanish online financing portal „iAhorro“. But aalso the fixed-rate mortgages würthein their opinionof an imminent „mortgage war“between the banks. The current strong demand and the simultaneous increase in the supply of new and existing properties are thus creating ideal incentives for investors and home buyers in Spain.
Editorial / Source: iAhorro
