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Posts Tagged ‘European Central Bank’

Euribor interest rate decreases

The decline of the interest rates from 1.5% to 1.25% by the European Central Bank to improve the economy in the Euro zone, is having results.

This measure meant a sharp decrease on the Euribor rate. This is the main reference index for mortages in Spain, and this rate, tightly linked to the public interest rates, usually follows the general trend.

The Euribor decreased from 2.105% to 2.044%. This is the lowest since April. This move makes the Euribor ore similar to the Euro zone interest rate.

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Euribor interest rate

Euribor -the rate indicator that is linked to more than 4 million mortgages in Spain- goes down to 2.067 % by 30  September 30, 2011, but is still higher than September 2010 in 0.647 points.

This fact negatively affects the mortgages as it increases the monthly payment. If we take in consideration an average 20 years mortgage of 120.000 Euros with annual review in September, it will be affected with an increase in the monthly fee in about 37.29 Euros, equivalent to an annual increase of 447.48 Euros.

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The mortgage reference rate increases again in June

The Euribor interest rate, which is used as reference for most mortgages in Spain, ended the month of June 2010 at 1.281%, which make these three consecutive months on the rise and marks its highest value since August 2009 when it stood at 1.334%. Analysts say it will continue to increase its value slightly.

The reason for predicting the increase of the Euribor rate is the uncertainty in the interbank market, which has not improved even after the European Central Bank guaranteed liquidity or the Spanish Treasury auctions closed successfully.

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