The Euribor March closed at 1.21%
April 8th, 2010
The Euribor, the interest rate to be granted the most mortgages in Spain, today fell one-thousandth daily rate up to 1.213%, and closed in March at the height of 1.21%, which added the third consecutive month of declines, after the break indicator in December the downward course of fourteen months.The index is moving closer to the ground set by most experts at 1.20%. However, despite the fact that the index continues to fall, its fall has eased considerably, and that so far this year has dropped only one hundredth 0.03, compared to the decline of 1.54 points recorded in the first three months 2009.
The fall of the March Euribor back cheaper mortgages and
users may notice a decrease of about 41 euros per month and 500 euros per year. Thus, for an average mortgage of 120,000 euros, for a term of 25 years and with a spread of 0.80%, families will pay 509 euros per month compared to the 550 euros they paid in March 2009. In the case of semi-annual review mortgages, the drop is only 7 euros, and the annual cut is less than 100 euros.
Although the decline is diminishing, analysts emphasize that the delay in the rise in interest rates, expected in early 2011, the indicator will extend downward course until the summer.
From this date, consider that the indicator could be maintained to start up later this year or early 2011, unless there is some fact affecting the interbank market to alter this scenario.
In this sense, the sector has begun to discount the rise in interest rates next year, the withdrawal of the measures the European Central Bank's liquidity and higher capital requirements.
CLIMBS THE DIFFERENTIAL OF THE BANK.
Although users will notice the drop in its shares Euribor, the collapse has not been fully transferred to loans because banks have been forced to raise their spreads, which in the past two years have increased from 0.50% to 1%.
However, some institutions offer the possibility of reducing the differential with a strong link, which passes through contracting products like pension plans, credit cards or life insurance.
The amount of mortgages have also been adapted to the new situation and has been reduced to 120,000 euros on average. The fall of this figure has not only been influenced by the decline in housing prices but also by the level of risk they are willing to take on banks has eased.
In this sense, institutions insist they have not closed the tap of claims and continue to provide liquidity to creditworthy customers, but the expected increase in unemployment, the deteriorating economy and the increase in defaults forced the banks to be more prudent.
The cut of mortgages will partly mitigate the VAT hike, expected to be implemented from July, and will also affect housing. According to a study by the Organization of Consumers and Users (OCU), the increase in this tax from 16% to 18% in the general rate of 7% to 8% in the small, could cost around 290 euros per year to each family if companies decide to pass it on prices.
Although the decline is diminishing, analysts emphasize that the delay in the rise in interest rates, expected in early 2011, the indicator will extend downward course until the summer.
From this date, consider that the indicator could be maintained to start up later this year or early 2011, unless there is some fact affecting the interbank market to alter this scenario.
In this sense, the sector has begun to discount the rise in interest rates next year, the withdrawal of the measures the European Central Bank's liquidity and higher capital requirements.
CLIMBS THE DIFFERENTIAL OF THE BANK.
Although users will notice the drop in its shares Euribor, the collapse has not been fully transferred to loans because banks have been forced to raise their spreads, which in the past two years have increased from 0.50% to 1%.
However, some institutions offer the possibility of reducing the differential with a strong link, which passes through contracting products like pension plans, credit cards or life insurance.
The amount of mortgages have also been adapted to the new situation and has been reduced to 120,000 euros on average. The fall of this figure has not only been influenced by the decline in housing prices but also by the level of risk they are willing to take on banks has eased.
In this sense, institutions insist they have not closed the tap of claims and continue to provide liquidity to creditworthy customers, but the expected increase in unemployment, the deteriorating economy and the increase in defaults forced the banks to be more prudent.
The cut of mortgages will partly mitigate the VAT hike, expected to be implemented from July, and will also affect housing. According to a study by the Organization of Consumers and Users (OCU), the increase in this tax from 16% to 18% in the general rate of 7% to 8% in the small, could cost around 290 euros per year to each family if companies decide to pass it on prices.
Tags: euros per, interbank market, the bank
