Spain's Mortgages: What's Euribor and how does it affect me?

If you purchase property in Spain and intend to take a Spanish mortgage, whether or not you are from Spain, then you might have heard "Euribor," which Spanish banks discuss a lot. But what does Euribor mean and how does it affect you if you take a Spanish mortgage? We got all the info.  buy house in qatar

What is Euribor? What is Euribor?

For what does Euribor use?

How does Euribor impact the payment of mortgages?

What is Euribor? What is Euribor?

The definition of Euribor has become a very popular term for Spanish banks and can sound a little confusing, especially when Euribor is not commonly employed or does not exist in your own country. Euribor is the acronym of the Euro Interbank rate offered and essentially refers to the interest rate at which credit institutions lend each other money. This rate is fixed and adjusted regularly by the European Central Bank (ECB).

For what purpose is Euribor used?

Euribor is not only talking about a single interest rate, but rather about an average of the rates that European banks lend to each other for a specific time. For each of the given Euribor terms or maturities, there are therefore 8 different Euribor values: 1 week, 2 weeks, 1 month, 2 months, 3 months, 6 months, 9 months and 12 months. Although it might be a little difficult to take a mortgage in Spain, the 12-month Euribor rate that you need to worry about is the most widely used benchmark for mortgages in Spain. Simply put, the 12-month Euribor is the normal interest rate used in the calculation of your monthly Spanish mortgage payments.

How does Euribor impact the payment of mortgages?

In Spain, mortgages usually have fixed, variable or mixed interest rates (a mixture of fixed and variable rates). Mortgages with a variable interest rate will be most affected by Euribor, and in exchange, if the Euribor increases, the monthly mortgage payments will increase, or vice versa. The majority of Spanish mortgages with variable rates of interest are measured as a percentage plus Euribor that are usually between 0.75% and 2%. Euribor prices are currently negative and have historical downsizes, which means that it may now be a great time to purchase property in Spain.

Annex. Annex. Next Generation EU, Real Estate Stimulus

Portugal's Next-Generation Recovery and Resilience Plan foresees the EUR 2.2 billion grant for renovation of buildings and improved energy quality from the EU (i.e. around 15 percent of the total subsidies). The funds would also help support 26,000 housing deficiencies in households. 4

Portugal faces significant obstacles in the field of energy conservation. 82% of residential buildings were constructed prior to 19905 (around 3.3 million buildings) and have poor energy efficiency ratings. 6 In addition, the Portuguese Energy and Climate Plan identified investments of EUR 6 billion to achieve energy neutrality by 2050.

Simultaneously, in Portugal 26,000 households are listed as housing deficiencies. The construction or refurbishment of these 26,000 households in 2021-2026 will require slightly more than 4,000 homes a year (in 2020 17,260 homes were built in Portugal).

4. Result of the 2018 household numbers with housing deficiencies study conducted by the Housing and Urban Rehabilitation Institute. 5. Bank of European Investment (2020). «The potential for energy efficiency investment through European Union financial instruments. In-depth analysis of Portugal." 6 May. May. In the IMF publication "Sectorial Policies for Climate Change Mitigation in the European Union 2020," about 70% of households in Portugal are energy certified at a D or below rating (on a scale ranging from A [maximum] to E [minimum]).