Having spent eleven out of last years twelve months in negative interest, the 12 month Euribor fell from -0.074 in November, ending the year at -0.08.
The Euro Interbank Offered Rate, otherwise known as the Euribor – the rate from which mortgage repayments are calculated in Spain – was down 236% compared to the rate of 0.059 in December last year. Spanish borrowers with a typical 120,000€ annually resting mortgage over a 20 year term will see their monthly repayments fall by around 7€ per month.
According to data released by the National Institute of Statistics, as mortgage interest rates have dropped, the number of new mortgages increased 17% in October. Whilst the average loan value dropped 1.1% in October to 110,035€, new lending increased 13% by volume and 16.3% by value in the first 10 months of 2016 with average loan values increasing 2.9% for the same period.
In a period where property prices are still well below those of the 2007 peak and bank financing is most likely as cheap as it is ever going to get, this presents a prime opportunity for investors and homebuyers alike to purchase Spanish property. With Bankinter forecasting the Euribor to rise above zero in the second half of 2017 it is clear that mortgage rates at this level cannot last forever.