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Euribor's 11-month negative trend means average monthly mortgage savings ranging from €4.31 to €9.12
10 January 2017 @ 09:45

SPANISH-BASED homeowners with mortgages saved a significant amount of money in 2016 thanks to the Eurozone interest rate being negative for 11 consecutive months.

The highest savings were seen in Madrid and the Basque Country – those whose mortgages come up for their annual review in December will see their payments in 2017 go down by an average of €110 over the year, or just under €10 a month.

The Euribor, which is used to calculate interest on mortgages in Spain and all other countries which use the euro as currency, closed 2016 on -0.082%, meaning an average saving of €80 a year for mortgage payers nationally.

Despite popular misconception among consumers, however, this does not mean a refund on mortgage payments, particularly as most lenders set their rates by a fixed percentage on top of the Euribor – at best, if the Eurozone interest rate drops, interest on mortgages may reduce to zero, but in most cases a small percentage still applies.

According to the National Statistics Institute (INE), a typical mortgage for buying a property in Spain as at December 2015 was €107,880, meaning that a 25-year term and a 'Euribor +1%' deal would mean the average monthly payment came out at €409.46.

At that point, the Euribor was still above zero – but only just – at 0.059%, and now, a year later, the same mortgage payment would come in at around €402 a month.

The highest average mortgages taken out to buy a property in the last year were in Madrid, with a typical figure of just under €143,000, whilst the lowest were in the land-locked western region of Extremadura, at €67,700.

Read more at thinkSPAIN.com



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