Euribor goes up again but starts to ease off

31 October 2006

MADRID — The Euribor, the indicator used to fix mortgage interest rates, has risen to 3.79 percent, the highest level since June 2002.

But analysts say the rise – the 10th in consecutive months – has not been as sharp as expected.

The Euribor increased by 0.084 points compared with the figure for September.

In October last year, the Euribor stood at 2.41 percent, before starting its sharp rise.

In practical terms, the average mortgage of EUR 150,000 taken out over 25 years will go up by EUR 115 each month.

Over a whole year, this will mean a rise of EUR 1,380.

The Spanish Mortgage Association said the rise of the Euribor had eased its increase year-on-year.

Mortgage rises in October due to the increase in the Euribor are going to be less comparatively than those experienced in August and September.

Analysts consulted by EFE said the Euribor is going to reach nearly 4 percent by the end of the year.

Pablo Guijarro, of the International Financial Analysts, said he believed the Euribor would continue going up for the next six months.

Estefanía Ponte, of Fortis Bank, said she believed the Euribor should reach 4 percent by the end of the year then go on up to 4.1 and 4.2 percent at the beginning of 2007.

Consumers’ associations said this level of indebtedness was dangerous for many families who were living at their limit. 

[Copyright EFE with Expatica]

Subject: Spanish news