Euribor hits new record low

Photo: Yngvil Osdal Runde

The Euribor has reached a new record low, the Bank of Spain has confirmed, as mortgage rates remain at historic levels of affordability.

The Euribor is the rate that is used by many countries to determine their own mortgage rates. The Bank of Spain has confirmed that the Euribor ended 2015 at the record low of 0.059 per cent, marking a fall of 80 per cent from the 0.323 per cent at the start of 2015 - the highest yearly fall of the last 10 years.

Only in July 2015 did the Euribor show a slight monthly rebound from 0.163 per cent to 0.167 per cent.

People with a 20-year mortgage of €120,000 and Euribor + 1 per cent, for example, will have seen their annual quota drop €175.56, explains Fotocasa, the equivalent of almost €15 per month.

As a result, mortgage lending has been growing in Spain, with figures from the National Institute of Statistics last year showing that lending rose 7.1 per cent in October 2015, the 17th monthly increase in a row.

In France, meanwhile, the Euribor's low rate has seen French mortgages at their most affordable for many years, boosting interest from buyers.

"We did see quite a big jump (around 25%) in buyers seeking a mortgage for their purchase," says Trevor Leggett, Chairman of Leggett Immobilier, of 2015.

"Our sales last year rose by 30 per cent and this is because we've seen once in a decade buying conditions," he added. "British purchasers have benefited from a weak euro, cheap borrowing and the lowest French property prices in years. Subsequently they have been snapping up bargains all over France... with fixed rate French mortgages starting from 2.15 per cent buyers see an opportunity to purchase property that they couldn't afford in the UK."