Via translation from La Vanguardia, Euribor at Historic Lows, Mortgage Interest Drops by €166 Per Year.Â
 The 12-month Euribor, on which most Spanish mortgages are based, closed the month of November at 0.079%, setting a new record low and falling for the first time below 0.1%.
The monthly closing represents a decline of 0.256 percentage points since November last year.
A citizen with a mortgage of 120,000 euros will get a will save almost 14 euros per month, 166 euros per year.
XTB analyst Jaime DÃez explained to Europa Press that the index has experienced a 50% drop since the beginning of the month based on “fruit of the proximity of the next meeting of the European Central Bank” to be held this Thursday by president Mario Draghi.
Negative Mortgage Rates Increasingly in PlayÂ
Hey, why not a negative Euribor so mortgage holders get money back?Â
Actually, negative interest rates on mortgages happened in April of this year, just not on 12-month Euribor.
(Click on image to enlarge)
The above table from on Euribor Rates.
Anyone with a mortgage rate tied to 6-month Euribor or less now gets paid to have a mortgage. In Spain, most mortgages are tied to 1-year Euribor.
Addendum
Reader Allen, president of a mortgage company pinged me with a comment that the spread on a typical Spanish 20-year mortgage is Euribor + 1 percentage point.
He is correct. That said, typical does not imply always.
In the US, I had a very unconventional mortgage, now paid off, that was at 1-month Libor rounded to the nearest 0.25 plus a spread of 0.25. Libor briefly spiked in 2007 (anyone recall that?) and I had to calm my wife who was starting to think I was crazy for getting into such a loan. I assured her Bernanke would be cutting rates like mad. Soon thereafter our mortgage rate crashed and was at 0.25% for long periods of time.
In Europe, this year, there were negative rates in at least 3 countries: Denmark, Spain, Portugal.
