Recent data published by the Spanish Mortgage Association (AHE) has revealed that the average mortgage in Spain is now 40% cheaper than it was four years ago.
In October 2008, the monthly payment for a mortgage of €120,000 over a 25 year term was €719 - €8,520 a year – while this October, the monthly payment is just €433 – €5,196 per year – a saving of €286 euros per month, or 40% less.
These falling mortgage charges are due to the plummeting Euribor, the index used throughout the eurozone to set mortgage repayment terms. Whilst 2008 saw it reach its peak, with a rate of 5.393%, the Euribor closed October 2012 at its lowest level to date, just 0.65%.
Economic experts believe that the rate will not be rising in the near future and that it may even drop further, providing even more incentives for buyers to snap up property in Spain.
“We do not expect a rise in the Euribor unless economic conditions change significantly. We have had quite some time with the index being low, we have even reached historic lows, which is a milestone,” commented IG Markets' strategist, Soledad Pellón, who stated that the rate will remain at “quite low” levels and may have a “further drop” in the coming months and years.
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