Borrowers in Spain face rising mortgage repayments as Euribor shoots up 

RESIDENTS of Spain could see their mortgage payments increase soon thanks to the ongoing rise of the 12-month Euribor. The rate is the most commonly used benchmark for the calculation of home loans in the country, and is currently at a level not seen since December 2008. 

At the end of January, the 12-month Euribor was at a monthly average of 3.337%, according to Spanish news agency EFE. This will mean that mortgages that are due for recalculation based on this rate could cost an extra €3,400 in yearly repayments. 

The rise in January from December was 32 basis points, up from 3.018% that month. 

Compared to the same month in 2022, the rise is a whopping 3.8 points, given that a  year ago the Euribor was actually in negative territory, at -0.477%. 

Figures crunched by EFE show that an average 25-year mortgage of €150,000, and with an interest rate of the Euribor plus 1%, would cost borrowers an extra €286 a month were it to be recalculated based on the January figure. That’s around €3,430 a year.

The reason that the rate is on the rise – the sharpest since it was created – is thanks to the change in the European Central Bank’s monetary policy. Last year saw the central lender raise rates on four occasions in a bid to combat the high inflation in the eurozone. 

One expert told EFE that he expected rates to reach 3.5% or 4% at the end of the first quarter of 2023, or at the beginning of the second.

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