Light relief for Spanish mortgage payers as Euribor hits historical low
Friday, June 6, 2014 @ 9:53 AM
MORTGAGES in Spain are set to get cheaper now that the Euribor has plummeted to its lowest level in history.
Already at a record low of 0.25 per cent - compared to over five per cent in 2007 - the European Central Bank (BCE) has revealed plans to drop the interest rate affecting the common currency zone to 0.15 per cent.
The idea is to enable credit to flow more easily and create liquidity within the Eurozone, since the interest rate reduction will bring down mortgages and personal and business loans.
It also means savings will get a lower return, but speculators across the continent have jammed the stock markets in a bid to buy shares at low rates and sit on them in the hope they will eventually rise in value.
Both the French socialist president François Hollande and German chancellor Angela Merkel have praised the move, saying it is necessary to help restart the EU's economy.
Economists in Spain say the impact on the average householder will be minimal, since rates were already very low, but will save a few euros a year for those with mortgages - although all bar the most cautious of investors will need to revisit their financial planning arrangements to help increase their spending power through the resulting returns - decisions which will inevitably force savers who rely on a certain level of interest to take on more investment risks.
Read more at thinkSPAIN.com