will euribor rate fall now ECB has cut rates??

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13 Oct 2008 00:00 by glenn&kerry Star rating. 19 posts Send private message

does anybody know if there will be a decrease in the euribor rates now that the ecb has cut its rate by 0.5%. we are trying to arrange a mortgage for our property but cannot decide if it will be best to take a sterling loan or a euro loan. the sterling looks tempting as Mr brown has cut the base rate by 0.5%  but will the euribor do the same??? if it does then it will be a better option. Is there anyone out there with a few words of wisdom? (or a crystal ball!!)

I have noticed the euribor has dropped today slightly... is this a sign of things to come?? i hope so! 

thanks  





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13 Oct 2008 17:31 by georgia Star rating in Algorfa (As seen on .... 1918 posts Send private message

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I think the Eurobor has also dropped by 0.5%, i would say the Euro mortgage is your best bet.....

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14 Oct 2008 12:34 by Smiley Star rating in San Pedro de Alcanta.... 2436 posts Send private message

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The ECB has cut rates but this in itself does not determine what will happèn to Euribor as that is the rate at which prime banks lend to each other in the wholesale markets. One would like to think that with growing confidence retruning to the markets and banks being more comfortable about lending to other institutions the Euribor rate will ease. Annual Euribor is currently 5.425 so while it has eased slightly it is not significant so far.

Polish off your own crystal ball!

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19 Oct 2008 23:53 by MagsB Star rating in Scotland and La Mari.... 26 posts Send private message

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How does the mortgage work in Spain? (in real terms) from what I can gather from our bank statement we are paying 6.51% ? it's suppposed to be 1% above the euribor? so all I can say is that we are now paying another £50 extra a month!!

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20 Oct 2008 00:34 by Smiley Star rating in San Pedro de Alcanta.... 2436 posts Send private message

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If youre currently paying 6.51% that is about 1% above Euribor. In fact Euribor has dropped marginally to about 5.45 from 5.49 but I imagine when your current rate was set that it was 5.51%. Euribor has absolutely nothing whatsoever to do with the European Central Bank Rate - just as Bank of England Base Rate has nothing to do with LIBOR or mortgage lenders Standard Variable Rate.

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21 Oct 2008 08:49 by advisor Star rating in London most of the t.... 316 posts Send private message

Despite the BOE cutting the UK base rate the first email we received was to inform us of one lender increasing their rates todate no lenders have passed on the rate cut and we dont beleive that they will as all lenders feel they need to make som emoney in the current climate!

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22 Oct 2008 00:24 by Smiley Star rating in San Pedro de Alcanta.... 2436 posts Send private message

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looks as if the action is starting to pay off - Annual Euribor published today at 5.14% so maybe the action is starting to filter through to interbank lending - we shall see

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06 Nov 2008 12:43 by woodycurtain Star rating in south wales. 123 posts Send private message

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Stop Press!!!

Bank of England have just reduced base rate by 1.5% to 3%.

Will there be any movement from the ECB?



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06 Nov 2008 13:17 by chrisfisher Star rating in Malaga. 38 posts Send private message

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I guesstimate that the cut will also happen here too........if anybody finds out please post here





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06 Nov 2008 13:17 by chrisfisher Star rating in Malaga. 38 posts Send private message

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I guesstimate that the cut will also happen here too........if anybody finds out please post here





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06 Nov 2008 13:17 by nfm2862 Star rating in Welling, Kent & Al A.... 1526 posts Send private message

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The Euribor rate has been steadily reducing over the past few weeks & is now almost back to where it was 12 months ago.

http://www.euribor.org/html/content/euribor_data.html 

If you click on Historical data for 2008 it will give you a spreadsheet of all the rates on a day by day basis throughout the year.

Noreen


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06 Nov 2008 13:30 by The Sheriff Star rating in Rojales, Quesada. 33 posts Send private message

Oooo As a man with a wife, 3 kids and a very expensive interest only mortgage - I do hope so !

A bit of advice if I may (Smiley ??) which may help others.  My mortgage is based on IRPH plus 0.6% which is currently coming out at just under 7% - the mortgage is with UCI who I understand are renowned for charging expensive set up costs etc so I assume their rates are high too.  Will any interest cut (please God !!) affect the IRPH and when.  My understanding is that this is a rate set by the banks (??) based on the lending rate over the last 3 years ??? In which case the interest rate should surely be less or will be in the future !  Does anyone know when I could expect a rate cut - The monthly payments have increased considerably over the last 2 years !!  I need a reduction !  Any advice gratefully received. 

Many Thanks

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06 Nov 2008 13:42 by nfm2862 Star rating in Welling, Kent & Al A.... 1526 posts Send private message

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The ECB has cut interest rates by 0.5% in the Eurozone, reducing it to 3.25%

Noreen

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06 Nov 2008 13:54 by advisor Star rating in London most of the t.... 316 posts Send private message

As with any interest rate cut how much the lenders decide to pass on is the main point. LTSB UK have stated cleverly that they will pass the whole amount onto........thoiseon their svr which is about 35% of their borrowers!
Irrespective of how much they pass on all it ultimately means in the UK is that taxes will go up as simplistically the country has no money and much as the lowering of rates has been done to try to steer the UK out of the recession all it will do is temporarily boost consumer confidence-the governemnts need for money will remain constant.


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06 Nov 2008 17:34 by Smiley Star rating in San Pedro de Alcanta.... 2436 posts Send private message

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Couldnt have put it better myself Shaun. IRPH is one of those complex rate calculations and one of the reasons we have never favoured lenders like UCI is that while the IRPH is a published figure some lenders (such as UCI) have their own rinky dink as to how they use it. I dont know if they still have it but UCI used to have a thing called a Directors rate as well - at the time this was a rate at Euribor plus x margin (advertised) - cant remember the exact margin - however when they sent a quote out for a client the pay rate would actually be much higher - it transpired that it was only E plus X if the pay rate was above 5% (or something like that) if not they applied a complicated formula which equated to something like Euribor plus 2.5% - horrendous and not exactly transparent - one of the reasons we stopped dealing with them. Until 06 they were the largest lender in Spain for non resident applications - used to bombard estate agents with visits and freebies and the source of most of their business i think - trips to China etc for volume of business - not to mention the commission for introducing the client in the first place.

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12 Nov 2008 12:56 by Ando Star rating in Wolverhampton/Balsic.... 38 posts Send private message

I wish someone could explain my spanish mortgage repayments.In september the rate was 5,59900%

I open my statement this morning for october expecting a rate cut, but the rate as gone up to 6,57300%

Any Answers





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13 Nov 2008 12:02 by advisor Star rating in London most of the t.... 316 posts Send private message

Ando

I am guessing that you have had your mortgage for just over or coming upto one year, if this is the case it is likely that

a) you initally had a rate of x

b) it was stated at the time that after 12 months it would rise to euribor + x

hard to aid without sight of paperwork , ie original offer.

good luck



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13 Nov 2008 14:25 by dealse Star rating in Welwyn Hertfordshire.... 64 posts Send private message

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The big thing you are missing is how you will service the EURO mortgage. If you have no Euro income you will have to buy euros.

This is getting more and more expensive all the time, we are now at an exchange rate of 1.1850 (we were at 1.50 last summer!)and in my mind will go a lot lower, perhaps 1euro/1 pound, that will hurt so stop thinking about tiny percentage differences, lock into a gbp mortgage and take the exchange rate, you will have certainty in knowing how much gbp it will cost you.



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13 Nov 2008 20:00 by advisor Star rating in London most of the t.... 316 posts Send private message

Dealse

as ever a matter of opinion,

my current deal -forward purchased gives me 1.41 e -£1.00 sterling, ok due to my business I have an agency with a large currency firm and from volume of trade probably get an ever so slightly better deal ,however these types of structure are available to all and as with any currency transaction it is a gamble.

Look at the mighty $- 6 weeks ago circa $1.91-now at what $1.51! It is my opinion that eveyone becomes greedy at some point ie; should i buy now or will it go higher / lower this is in regard to literally everything!

If you are suggesting taking a UK based remortgage and using these funds to pay off the spanish one then it is going to be equally frustrating for many reasons, if you are talking about remortgaging the spanish one then aside of the costs (circa 4-5%) what about the highly likely fact that the property is now worth less than it was?

All in all a frustarting situation for many.



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14 Nov 2008 08:59 by dealse Star rating in Welwyn Hertfordshire.... 64 posts Send private message

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You are very lucky to have a forward in place at 1.4100, i was really replying to the original thread and pointing out that if you dont have any euros to pay the loan you will have to buy them at retail rates (probably 2% away from the interbank market, so thats 1.1450 as i write). Certainty is the only way to look at it so unfortunatly having a GBP loan and do the FX into Euros is a hard decsion to make but at least the known amount of GBP payments is more reasuring.

 

Simon

 



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