Euribor Rate

[Dave]

Euribor for February 2007: 4.59%

Euribor – the interest rate most commonly used to calculate mortgage payments in Spain – rose strongly in March to 4.59%, reversing a trend of falling Euribor rates in the first 2 months of the year. This was the biggest monthly increase in Euribor since March 2006, and by the end of the month Euribor was well above 4.7%

Euribor is now 12% higher than it was a year ago, and the March rise means that borrowers on annually-resetting variable rate mortgages will see their annual mortgage payments rise by an average of 480 Euros. According to the National Statistics Institute the average Spanish mortgage has a value of €142,793, and a term of 26 years, which means a €40 rise in monthly mortgage repayments from €786 to €826.

Euribor is derived from European Central Bank (ECB) base rates, which were left unchanged at 4% in March. The ECB has made clear that controlling inflation remains its primary concern, warning that base rates may even have to rise to choke off inflation in the Euro zone. The ECB’s reiteration of its hawkish stance in March helps explain why Euribor has started to rise again after 2 months of declines. Euro Zone inflation reached 3.5% in March, well above its target rate of below but close to 2%. Inflation in Spain rose to 4.6% in March.

All of this means that falling mortgage rates are unlikely to ride to the rescue of the Spanish property market. If anything, mortgage rates in Spain are set to continue rising, putting further pressure on household budgets, and reducing demand for Spanish property.Spanish Property Insight

Click on the link below, where you can follow the daily euribor rate
http://www.euribor-rates.eu/current-euribor-rates.asp

Dave

[Dave]

The Euríbor daily breaks the barrier of 4.9% and reached its highest level in seven years

Should April closed at this level would be a rise of 0.19 points over the Euríbor registered in March 23-04-2008. The euribor rate is the most widely used to calculate mortgages.
 
The Euríbor, the kind that grants most of the mortgages in Spain, broke into their daily trading barrier of 4.9%, the highest level in more than seven years, since December 13, 2000, when it was placed % in 4942, according to data collected by Europa Press.

Specifically, the indicator climbed into their daily quotation% until 4933, marking the ninth consecutive annual maximum daily, which placed the monthly average in the 4.78%, in the absence of five days before the end of the month.

Should April closed at this level would be a rise of 0.19 points over the Euríbor recorded in March, when rose to 4.59%, and would be more than half a point above reached in April 2007, which placed in the 4253%.

The Euríbor reaches this level after warnings made last week by the European Central Bank (ECB) on upside risks on inflation, which remove the possibility of a drop in interest rates.

According to experts consulted by Europa Press, Euríbor will continue until next summer at high levels, because it is difficult for the ECB, which focuses on the monitoring of prices, cut rates until the second half of the year.Translated from laverdad.es

[Dave]

Euribor Rate Breaks Record:

The Euribor rate, the rate used to calculate most mortgages in Spain, reached an historical daily high of 5.432% earlier this month. It placed the average monthly rate of the Euribor at 5.243%, just 0.005% lower than the record reached and recorded in August of 2000, when it rose to 5.248% as a monthly average.

Since the Euribor rate was introduced in January 1999 it has varied between a low daily rate of 1.929% in 2003 to a previous historical high of 5.34% in August 2001, although this has now been broken with the rate reached in the middle of June of 5.432%.

This is not good news for those that have to renew their mortgages, as their monthly payments will increase. This is just another expense that homeowners and families will have to cope with and it adds to the higher costs of food, transport, fuel and electricity, which have all just recently risen. Costa Calida informer

[kike101a]

Hello, all

For my first posting as a new La T forum member, can you advise on the best currency transfer service from your collective experience, please. I'm looking at UKForex and smartcurrencyexchange.com

Aiming to transfer funds to complete today.

Thanks,
Kike

[Dave]

Hi Kike,

Speak to Alex Thompson at Escape Currency Tel: +44 (0)1296 339811 E-mail: alex@escapecurrency.com
Website: www.escapecurrency.com.

Alex has always been very helpful, when we have contacted him.

BTW, i did not manage to take any photo`s of your apartment sorry, but i can tell you that the swimming pool is open and the garden area`s are are looking good in your apartment area .

Dave

[kaz]

Hifix also good

[Dave]

Mortgage rate rockets, Euribor index hits new record high level

THE EURIBOR rate, used by the majority of banks to set mortgage interest rates, hit a new record peak on Monday. As thousands were still celebrating Spain’s football success, many woke up on Monday to see their variable rate mortgage repayments increase between 75 and 50 euros on average as the Euribor index for the month of June closed at 5.361 per cent.

Experts say the Euribor rate increases when the Central European Bank is about to raise its official rate, a move that was expected yesterday (Thursday) after CEB president Jean-Claude Trichet recently talked of a ‘possible’ rate rise to slow down increasing inflation rates in the EU.

Meanwhile, experts reckon the Euribor has reached its peak and that it will gradually fall to around 5.15% by the end of this year. This is the fourth consecutive month of Euribor rises and the fear of repossession is affecting more and more families.

The government’s 400-euro aid via IRPF retention on salaries has proved far too short to face the increases in mortgage rates, cost of living and other areas. Deputy prime minister Pedro Solbes admitted the economy will get worse before it gets better but said an upturn should come in the second half of next year.

The country’s economic situation is now the worst since 1995.  He forecast that by the end of the year growth will be below 2% and inflation about 4%, which will increase unemployment still further.cbnews

[Dave]

Euribor falls in August, but no immediate relief for Spanish mortgage borrowers

Euribor (12 months) – the interest rate normally used to calculate mortgage payments in Spain – fell to 5.323% in August, the first time Euribor has fallen since February this year.

Despite the slight decrease in August, Euribor is still just shy of its all time high of 5.393% in July.

And despite last month’s fall, Euribor is still 14% higher than it was a year ago, which means there will be no immediate relief for borrowers with variable rate mortgages that reset this month. Their mortgage payments will continue to rise.

A typical borrower with an annually resetting 142,000 Euro mortgage at 26 years with a rate of Euribor +0.5% will see their monthly repayments rise by 56 Euros, or 670 Euros per year.

The European Central Bank shows no sign of raising interest rates again this year, so the market expects Euribor to decrease slightly in the coming months, falling to just above 5% at year end.

But with the credit crunch still rocking the financial system, a further rise in Euribor cannot be ruled out. And even if Euribor does fall, Spanish lenders will continue to restrict mortgage lending, tighten their lending criteria, and charge higher fees. That will continue to depress the residential property market.(Spanish Property News)

[Sandra]

Courtesy of BBC News 6 November 2008

The European Central Bank has lowered its eurozone interest rates to 3.25% in an attempt to prevent a recession.

The bank reduced rates by half a percentage point from 3.75% amid increasing signs of slowing growth.

After the rate cut, ECB president Jean-Claude Trichet said: "I don't exclude that we could decrease rates again."

Also on Thursday, the International Monetary Fund (IMF) forecast that the eurozone's economy would shrink by 0.5% in 2009.

More cuts?

Speaking after the ECB rate cut, Mr Trichet said that the level of uncertainty stemming from the turmoil on the financial markets remained "extraordinarily high and exceptional challenges lie ahead".

He also said that inflation rates were set to continue falling, and added that the ECB had discussed the possibility of a bigger rate cut on Thursday

The comments leave the ECB room for more rate reductions, especially after the Bank of England slashed UK rates from 4.5% to 3%.

The last time ECB rates stood at 3.25% was in October 2006.

Swiss rate cut

Also on Thursday, Switzerland cut its interest rates by a half percentage point, the second cut in a month.

The Swiss National Bank said it was cutting its the target range to 1.5-2.5%, and intended to hold the rate in the middle of this range.

Following the cut in Swiss rates, Henrik Gullberg, an analyst at Deutsche Bank, said: "I am surprised, but it is clear central banks generally are determined to cut rates sharply now when the inflation threat is receding".

The ECB cut rates by half a percentage point in October, as central banks worldwide, including the US Federal Reserve and the Bank of England, did the same in light of the worsening financial crisis.

Slowdown

In July this year, the ECB had raised rates to try to put a lid on growing inflationary pressures, but since then these pressures have eased considerably largely thanks to a sharp fall in oil prices.

While inflation - a main focus of the ECB - is at 3.2%, it is coming closer to the target of under 2% following the recent contraction.

"Inflation may go down to below 2.5% by year end," Natixis economist Ceric Thillier forecast.

A series of economic data released this week has shown how economies across the eurozone are slowing.

On Wednesday, figures showed that retail spending across the eurozone dropped in September, as consumers tightened their belts.

Retail sales dropped 0.2% from August, and by 1.6% compared with September 2007.

On Thursday, the IMF predicted in its latest World Economic Outlook that the eurozone would shrink by 0.5% next year, against an earlier prediction of 0.2% growth.

[Dave]

Euribor Rate Continues to Fall:

The Euribor rate, the base rate used to set most mortgages in Spain, has ended the month of October at 5.2%, its lowest level since May.

This comes ahead of the expected announcement of an interest rate cut by the European Central Bank, following the half point cut announced by the Federal Reserve in the United States. This is good news for those whose mortgage is up for a rate review, as their monthly payments will drop by approximately €70 per month on an average €160.000 mortgage.

[Dave]

Euribor plunges, driving down mortgage repayments for 1st time in 3 years

Euribor, the rate normally used to calculate mortgage payments in Spain, plunged 17% to 4.35% in November, making annually resetting Spanish mortgages cheaper for the first time in 3 years.

Euribor, which peaked at an all-time high of 5.384% as recently as September, has plummeted in response to the European Central Bank’s (ECB) steps to liquefy the Euro zone’s financial system. Expectations of further interest rate cuts by the ECB are also helping to drive down 12-month Euribor rates.

November’s record fall means that Euribor is now 5.6% lower than it was a year ago. This will provide some relief to hard-pressed borrowers, but still leaves mortgage repayments higher than they have been for most of the last decade.

Euribor is expected to keep falling, and was down to a daily rate of 3.92% by the 2nd of December. Pedro Solbes, Spain’s Minister of Finance, has described Euribor’s downward trend as “very positive”, and claimed that if the trend continues, Spanish borrowers will soon be paying an average of 50 Euros less a month in mortgage costs.(Spanish Property News)

[AndyP]

The Pound to Euro rate is obviously causing regular mortgage payments to be a pain but light relief comes in that the Euribor rate currently continues to drop.

Todays rate for 'Euribor 1 month' is down at 2.915% so will help with the payments.

http://www.homefinance.nl/english/international-interest-rates/euribor-rates-1-month.asp

AndyP

[Sandra]

Hi Andy

Yes the Euribor rate drop is good news, BUT if you have a 6 month or annual review on your mortgage then you get the rate at the date of hte last review and will have to wait some time for the revisions to take place (so I was told by BBVA when I enquired about this).

Great news for those on monthly revisions though.

Sandra

[Sandra]

NEWS ABOUT THE EURIBOR COURTESY OF THE BBC

"The European Central Bank (ECB) has cut eurozone interest rates by half a percentage point to 2%.

The ECB has now reduced rates four times from 4.25% in September as it continues efforts to bolster the eurozone economy.

According to official figures, the eurozone has been in recession since September of last year.

The latest rate cut also affects Slovakia, which this month became the 16th country to adopt the euro.

   
"If we get more significant disappointments coming through, the market will continue to look for further rate cuts" says Dresdner Kleinwort economist Rainer Guntermann

Eurozone's key interest rate is now at its lowest level since December 2005.

However, they remain above the current UK rate of 1.5%, and between 0% and 0.25% in the US.

Explaining the latest rate cut decision, ECB chairman Jean-Claude Trichet said the level of economic uncertainty across the eurozone area remained "exceptionally high".

"There is clear further evidence to the assessment that the euro area is experiencing a significant slowdown largely related to the effects of the intensification and broadening of the financial turmoil," he said.

Lower inflation

The half-point rate reduction was broadly expected by analysts.

It comes as official figures showed that eurozone inflation fell to a 26-month low in December, thanks to a big decline in the price of energy bills.

Analysts say the fall in inflation gave the ECB room to cut rates still further without worrying that the move might lead to price rises.

However, with European banks still reluctant to lend to both individuals and consumers, it is unclear how much of an impact the latest cut in interest rates will have on lifting the economy.

"There may be a pause or smaller cut in February, but it will all depend on the data flow," said Dresdner Kleinwort economist Rainer Guntermann.

"If we get more significant disappointments coming through, the market will continue to look for further rate cuts."

Fellow analyst, Howard Archer of IHS Global Insight, said he expected eurozone interest rates to fall to 1% by the summer.A December study by research group Markit said that business activity across the eurozone was at its lowest level on record.

An economy is generally considered to be in recession following two consecutive quarters of falling output.

[Dave]

Euribor falls to 2.1%, easing pressure on some mortgage borrowers

Euribor, the rate normally used to calculate mortgage payments in Spain, fell from 2.622% in January to 2.1% last month (a change of -18.6%), suggesting that borrowers on annually resetting Spanish mortgages may start to benefit from smaller mortgage repayments.

This is the lowest Euribor rate since June 2005, and almost 50% lower than year ago, when it stood at 4.349%.

Assuming that lower rates are passed on by the banks, the average borrower should see their monthly mortgage repayments fall. Monthly repayments on a typical annually-resetting mortgage (150,000 Euros, 25 years, Euribor + 0.5%) should fall by 200 Euros a month - a saving of 2,400 Euros a year.

Some borrowers have complained, however, that falling base rates are not translating into lower mortgage rates, as banks pocket the difference. Some people have even reported that their mortgage rates have gone up.(Spanish Property insight)