The Bank of Spain has confirmed that the 12-month Euribor - the indicator used to calculate most mortgage rates in Spain - dropped to -0.127% in May, a new historic low which translates to an average annual saving of some 61 euros.
May's figures mark the 16th month in a row with the Euribor in negative figures, and the downward trend looks set to continue with the Central European Bank confirming "solid" economic prospects for the euro zone.
The estimated 61 euro annual saving for mortgage holders is based on the fact that in May last year the indicator sat at -0.013%, meaning that a mortgage of 100,000 euros across 25 years with a differential of Euribor plus 1% had a monthly cost of 376.28 euros. Monthly payments on a mortgage of these characteristics under the May 2017 conditions however, will drop to 371.20 euros, equating to a monthly saving of 5.08 euros or 60.96 euros across the year.
In addition, new residential mortgage lending rose by 20.2% in March compared to the previous year, according to the latest figures from the National Institute of Statistics (INE).
New mortgage lending has risen strongly every month this year with the exception of February, another sign of the continuing recovery of the Spanish housing market.
The value of the average residential loan rose by 6.4% to €114,469, and the average interest rate rose to 3.23%. So despite the fall in Euribor, new mortgage interest rates are on the rise after two years in decline.
