Alex Trelinski
HOME owners in Spain with variable-rate mortgages have received good news that the Euribor index used to calculate repayments is expected to reach its lowest figure since September 2022.
The Euribor is on track to close November on 2.51% which was expected to be reached next month.
It means that people on variable-rate mortgages who have their payments reviewed annually will get an reduction of €1,534 per annum based on a €150,000 loan over 25 years.
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Those figures have been worked out by financial comparison site HelpMyCash and mean a €128 monthly cut.
If the variable loan update is biannual, the fall will be around €98 per month.
The Euribor drop coupled with lower inflation and falling interest rates from the European Central Bank (ECB) has seen a rise in new mortgages being granted.
Last September saw 41,306 new loans for the purchase of housing- up 33.9% on the previous September according to National Institute of Statistics (INE).
The INE added that it was the highest monthly figure for two years.
Maria Matos from online property portal Fotocasa, said: “These are very positive rates that mark the beginning of a change in the mortgage cycle driven by the de-escalation of interest rates, the discounts that the market itself anticipates and the fall in the Euribor.”
“While it is true that fixed-rate mortgages will continue to be the most popular, variable-rate mortgages could begin to show greater competitiveness,” Matos added.
Real estate portals believe that 2024 could end up with 430,000 new mortgages granted.
“Competition between banks will drive a new rebound in purchase demand and loan applications at the end of the year, so mortgage signings are expected to accelerate,” Maria Matos predicted.
