Euribor allows property buyer’s mortgages to drop for first time since July 2010.

Barcelona real estate Blog

Tuesday, 28 February 2012 13:27

In February the Euribor closed at 1.68%, 16/100 less than its value in January when it was at 1.84% and which has resulted in the drop in the cost of mortgages for the first time since July 2010. This means that current home owners and potential buyers of Spanish property will see their annual mortgage being reduced.

Over the same period last year, the Euribor closed at 1.71%, 2/100 above the expected close level of this month, which means that an annual mortgage of € 200,000 over a 24 year loan period will decrease by 1% or 11 Euros per month less, or 132 Euros per year. If the same mortgage is over a 39 year life, then the costs would fall by 2%, which would result in a 12 Euro saving per month, or a 144 Euros per year.

With the constant monitoring of the Euribor, statistics show that the rate continues to fall, with February starting at 1.745% with an expected close rate at around 1.62%, which works hand in hand with the lowered interests rates laid down by the European Central Bank (ECB). Obviously with the fluctuation in the Euro Zone currency, the Euribor will increase or decrease on public view over the price of money, but that fact still remains that there is light at the end of the tunnel for Spain, especially for Madrid and Barcelona property.

Added together with popular opinion by Mr. Entrecanales, head of one of Spain’s wealthiest families, there is a belief that the asset prices in Spain have bottomed and political stability have generated a positive outlook for the country. With potential property investors from America, Asia and Latin America starting to dip their toes into the property market again, now might be the time to make a move.