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Posts Tagged ‘mortgage’

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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Mortgage approval rates change again

The Spanish National Statistics Institute -INE- reports that the interannual rate of approved mortgages registered a decrease of 6.8% in July 2010, totalling 55,570 deals closed.

The INE also points out that the amount of mortgaged properties increased in 0.8% in July compared to June. This, however, contrasts with a 1.1% decline from May to June. This data coincides with the increase on real estate commercialisation, even with the new VAT, that changed from 7% to 8% in the case of new properties.

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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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Be aware of the subrogation and novation commissions applied to mortgages

When it comes to signing a mortgage, it is important to pay special attention to all the commission expenses that we could come across during the mortgage duration.

The subrogation fee is a percentage of the outstanding capital to be paid in the case of changing banks without cancelling the mortgage. The reason to change banks in most cases is down to taking advantage of more advantageous terms, but when it comes to numbers this commission has to be taken into account in order to make a real assessment.

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The amount of mortgages granted by banks is on the increase

The Spanish mortgage market grew by 29.5% in the month of June 2010, in annual terms, the Spanish financial institutions lent 9.054 million Euros to families for home purchases, according to data released by the National Bank of Spain, Banco de España, and the Spanish Mortgage Association, Asociación Hipotecaria Española (AHE).

According to the various types of entities, banks granted credits in June amounting to 4.010 million euros, 55% more, while the saving banks, most affected by the restructuring of the financial system, lent 14.7% more, up to 4.625 million.

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