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Posts Tagged ‘euribor’

Upward trend of the euribor interest rate

During the first few days of the current year, experts in the financial field have started to release their forecasts in worldwide indicators, and the Euribor -the main reference of the vast majority of mortgages in Spain- has started the year by showing a modest increase, which will place it between 1.75 and 2%. This figure represents about half a point above the 2010 level (1.526%).

If we translate this data into the average mortgage payments, we find an increase from 130 € up to € 350 per year if we assume a hypothetical scenario of Euribor reaching 2%.

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the Euribor trend has changed from August 2010

The Euribor rate –main Spanish mortgages reference index- closes October 1,495%. This is a slight increase compared to the rate in September 2010, which was 1.420%. This information has been issued by Banco de Espana, the National Spanish Bank.

While mortgages recalculated with Euribor rates from January to July 2010 saw their monthly instalments reduced, mortgages revised with Euribor rates from August to October will see their monthly payments increased.

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Mortgages in EUR: a safe choice for EUR earners

Foreign currency mortgages are a high-risk investment out of the GBP-EUR circuit. The Spanish Consumers and Users Association (OCU in Spanish) confirms through a study that these mortgages have translated into great losses for their holders. A good example of this is the JPY-based mortgages for EUR earners: Their mortgages have increased a 25% on the last year.

The risk of foreign currency mortgages resides in the currency fluctuations, more significant than the changes on internal interest rates. The OCU accuses financial institutions of misleading clients by omitting information and not mentioning that the continuous revaluation of the EUR could only mean a high risk of later devaluation.

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The Euribor interest rate breaks its trend

The Euribor closed August 2010 at 1.421%, while during the same month in 2009 it only reached 1.334%, bad news for those who are due to revise their mortgage terms this month as they will see their monthly fee increase by approximately 6 €, about 72 € per year.

In July 2008 the Euribor reached its maximum record standing at 5.393%, a figure that counteracts with the minimum record registered in March 2010, marking 1.215%.

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Upward trend of the euribor interest rate

The details provided by the Spanish National Statistics Institute INE (Instituto Nacional de Estadística), set the Euribor, the main spanish mortgage index, at 1.373% July 2010, with a monthly rate which for the fourth consecutive month has undergone an upward shift. The Euribor closed July 2009 at 1.412% so this figure still allows mortgage holders who will have their mortgage reviewed this month a reduction of their monthly repayments, that represents a saving of 36 Euros per year, if we take as an example an average mortgage of 120.000 Euros at 20 years, representing 2 or 3 euros per month.

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