Spanish lending rises for sixth month in a row as Euribor hits new low

Mazarron, Spain

Spanish lending has risen for six months in a row this spring, as the Euribor rate falls to a new record low.

The Euribor base rate, which is used to calculate most mortgage repayment rates in Eurozone countries such as Spain and France, has been in an unprecedented negative territory for many months now, causing financing to become extremely affordable for borrowers. The 12-month Euribor fell to -0.106 in February, down from -0.095. In March, it fell even further to -0.11 , the 13th month in a row of negative reates.

As a result, those taking out mortgages in Spain, depending on their mortgage provider and package, could see their mortgage payments dip by around €5 per cent on a €120,000 20-year loan, notes Spanish Property Insight.

The unusual conditions have helped to contribute to recovering levels of activity in Spain’s housing market, with data from the National Institute of Statistics (INE) showing that mortgage lending jumped 17 per cent in January 2017 year-on-year to 27,240 new loans. This is the sixth consecutive month of increased borrowing, with lending effectively up for three years in a row, following several years of declines. This is also encouraging buyers to step up their budgets, with the average residential loan value up 6.4 per cent to €112,884 in January.

On, interest in Spanish property hit a three-month high in Q1 2017, with Spain accounting for 31 of the top 50 most-searched for locations on the portal. Malaga, Almeria and Tenerife were the most popular locations.


“Golden opportunity” as Euribor rates hit record low

4th January 2017

Foreign buyers on the continent have a “golden opportunity” at the start of 2017, as Euribor rates ended last year on a record low.

Euribor rates first became negative at the start of 2016, an unprecedented situation that has since become something of the norm. In the last year, Euribor rates have been below zero for 11 out of 12 months. The Euribor is the rate used by lenders to calculate mortgage repayments in countries such as Spain and France.

A year ago, the Euribor was 0.059, but it ended 2016 at -0.08, down from -0.074 in November and down 236 per cent year-on-year. That negative territory means that financing is becoming more affordble for borrowers using Spanish lenders, with mortgage payments falling around €7 per month on a €120,000 20-year loan, according to Spanish Property Insight.

The result is a rare opportunity to purchase a Spanish home with a loan at the cheapest possible price. Or at least, it would be, if the opportunity hadn’t existed for a large chunk of 2016. Spain ended the year as the second most popular destination on, with the National Institute of Statistics reporting that new mortgage lending jumped 17 per cent in October 2016.


Euribor rates have now been negative for almost a year

6th December 2016

Euribor rates have now been negative for almost a year, as mortgage conditions on the continent remain unprecedented.

The 12-month Euribor, which is used to calculate most mortgage repayments in France and Spain, fell from -0.069 in October 2016 to -0.074 in November, the 10 month in a row where it has been in negative territory. The rate’s dip into minus digits last year was an unusual surprise, but it has since become surprisingly normal. The benchmark rate for Eurozone mortgages is now 194 per cent below November last year, when it was at 0.079.

As Spanish Property Insight notes, this means that Spanish mortgage borrowers will see repayments fall by €8 per month for a typical 20-year loan of €120,000. While that may not sound like much, it adds to a series of declining repayment rates, meaning that financing property in, for example, Spain or France has never been more affordable.

Indeed, new mortgage lending jumped 10 per cent in Spain in September, according to the National Institute of Statistics, while record low French mortgage rates have been crucial in boosting demand for the country’s real estate, especially at a time when the pound has weakened against the euro.


Euribor rate negative for eight months in a row

4th October 2016

Euribor rates have stayed negative for the eighth month in a row this September.

The 12-month Euribor, which is the rate used to calculate most mortgage repayment values in Spain, France and other European countries, hit a record low, falling from -0.048 in August to -0.057, the eighth consecutive month of negative rates.

Indeed, compared to a year ago, when Euribor was at an already-low 0.154, interest rates for Eurozone mortgages has fallen 137 per cent.

The result means that Spanish mortgage borrowers will see repayments fall by around €10 a month (for a €120,000 loan on a 20-year term), which will make Spanish housing that bit more affordable for many.

However, savers are suffering, much like in the UK, where the Bank of England has lowered the base rate to a record low of 0.25 per cent, with no real returns offered on money stored in savings accounts. That too, though, is driving more to invest in property, with rental yields better than the bank’s return on savings and capital growth also impressive in cities such as Barcelona and Madrid, as well in parts of the Balearics.

Spanish New Today predicts that the unprecedented situation will continue for some time, with experts expecting conditions to remain the same for potentially two years. Fixed rate mortgages, meanwhile, are becoming increasingly popular.


Spanish mortgage lending surges, as Euribor stays at unprecedented low

15th September 2016

Spanish mortgage lending continued to surge this summer, as the Euribor remains at an unprecedented low.

The number of new mortgages signed in the Property Register in June 2016 jumped 15.5 per cent year-on-year, according to the National Institute of Statistics. 25,274 mortgages were registered in the year to June, taking the growth in new mortgage signings to 25 months in a row.

The average mortgage value rose 7.5 per cent to €112,515, although the overall value of outstanding loans fell, due to write-offs and loan retirements, according to the Spanish Mortgage Association.

The figures arrive as a string of measures indicate a positive recovery in Spain’s real estate market, with sales up and prices forecast by one of the country’s biggest banks to climb in the next year. That positive trend occurs against an unprecedented backdrop in the European mortgage industry, with 12-month Euribor rates, which are used to calculate mortgage repayments in Spain and other countries, remaining negative for seven months in a row. The rate remained at -0.048 in August 2016, a slight improvement from -0.056 in July, but markedly below the 0.161 recorded in August 2015. As a result, some borrowers in Spain with a €120,000 20-year loan will see their mortgage payments dip by around €10 a month, notes Spanish Property Insight.


Cheap mortgages in Spain still available for Brits

6th July 2016

The UK’s recent vote to leave the European Union has sparked concerns about the affordability of homes overseas, due to the weakening pound, but affordable mortgages in Spain aren’t going anywhere, reassure experts.

The UK’s recent vote to leave the European Union has sparked concerns about the affordability of homes overseas, due to the weakening pound, but affordable mortgages in Spain aren’t going anywhere.

Euro mortgages have been affordable for some time now, partly thanks to a record low Euribor rate, which has fuelled overseas interest in both Spanish and French real estate. While Brits may be leaving the EU in the coming years, Spain’s banks have indicated that lending criteria for UK clients will change only slightly, if at all, with lenders keen to keep their doors open to Britons, who constitute a large percentage of their business.

Meanwhile, the European Central Bank (ECB) has confirmed that interest rates in the Eurozone will remain low for a sustained period, enabling Spanish banks to continuing passing on low rates to mortgage clients, including non-resident buyers.

“Brexit is as much a threat to the recovery of Eurozone economies, including Spain, which on its own has a deficit with the UK,” comments Julian Walker, director at “The chance of the ECB raising interest rates for some time is very slim. As such, mortgages are incredibly cheap at the moment, with British buyers typically getting fixed rates of three per cent on a repayment mortgage, with an LTV of 65 per cent.”

The impact of the Brexit vote upon the euro, meanwhile, means that exchange rates remain around the level of three years ago for Brits looking to buy a house on the continent.

Crucially, sellers in Spain may also be more flexible on pricing to encourage transactions to continue.

“Don’t be surprised to see vendors, in particular Britons, be more open to offers,” adds Walker. “The likelihood of fewer British buyers in the market will mean they will want to hang on to those that do show an interest in their property, and if they are repatriating the proceeds of their sale to the UK, the weaker pound means they may be more open to accepting a lower offer in euros.”