Spain Set for at Least Two More Years of Affordable Mortgages

Spain Set for at Least Two More Years of Affordable Mortgages

Right now fixed rate mortgages are very affordable in Spain and it’s expected that things will stay this way for the next two years at least.

Getting hold of a mortgage has never been easier

Experts are predicting that, despite the uncertainty in the Eurozone right now the low interest rates that have helped to beef up the Spanish mortgage sector will be continuing for at least two more years.

These low mortgage rates have been a major factor in the recovery and resurgence of investing in the Spanish property market in the past 24 months. Spain is set to continue using the fixed rate mortgage levels that are offered by the Euribor; the Euro Interbank Offered Rate.

The Euribor is used as a safety valve for property sectors across Europe as it sets an average rate of interest payments amongst the Eurozone based on how an economy is currently performing. The European Central Bank has been scared by some of the recent financial blips in Europe and it’s expected that the Euribor rate will be kept below zero for the next two years at least until 2019.

Many Spanish mortgages are lent on the Euribor rate, which dipped down to -0.057% in September. This was also the eighth month in a row that the rate was negative. Normally these low interest rates would only be used on a shorter term basis and are used in an attempt to stimulate the national market.

Now the Spanish property market is expected to see the benefits of a low interest rate much like the German export-based economy received a healthy boost across two years from the low euro. The Spanish property market has become one of the most popular property markets across all of Europe. There are plenty of foreign buyers, particularly British buyers, who are now being offered great terms for purchasing a home in Spain.

It’s expected that the Euribor could go down even further and could reach even -1% in 2018, which would mean that mortgage repayments are even lower and the Spanish property market is even more interesting to investors.

There is some cause for concern from Spanish banks however. While it’s always good for banks to welcome more mortgage customers it could damage their long-term profitability, which could mean they tighten their belts when it comes to lending in a few years.

The Spanish banking sector and the real estate sector have been closely intertwined over recent years though so sensible banks are expected to maintain a watchful eye on the market and help it grow steadily rather than exploding and burning out. The good news for those banks is that “steady growth” is how the Spanish property market has been growing since 2014.