Historic low on average mortgage interest rate
The real estate market in Spain is experiencing extraordinary moments. So much so that a record has been broken in the average interest rate of loans for home purchase to reach an all-time low.
According to data extracted from the National Statistics Institute (INE), it has fallen from a rate of 5.4% in January 2009 to more than half: 2.56% in July 2019.
Reasons for the decline in the average interest rate
One of the main reasons for this progressive reduction in the last ten years is "the mortgage war being waged by the banks," in the words of Ana P. Larcos, an economics journalist and editor at Idealista News.
The European Central Bank, Larcos says, is driving economic recovery and inflation in the Eurozone. A macroeconomic factor that, together with the lowering of the Euribor rate (also at historic lows), is helping to lower the average mortgage interest rate in Spain.
The trend in Spain has remained stable over the last year, always moving below 2.7%.
More fixed-rate mortgages offered
The financial sector is also evolving. If 10 years ago the majority of mortgage contracts were made using a variable rate (almost always linked to Euribor), today the situation is different.
In fact, it is now possible to achieve fixed interest rates of less than 2% on mortgages with terms of 30 years. In other words, a figure below the Euribor historical average.
With regard to variable mortgages, still the most common, the interest rate has stabilised at 0.75%.
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"Advantageous terms for customers."
José Luis Martínez Campuzano, spokesman for the Spanish Banking Association (AEB), is confident that this outlook will continue along these lines in the future.
In statements granted to Idealista, the economist stresses that these "financing conditions" will continue to be "very favorable" thanks to the "high efficiency and competitiveness" of banks.
Bearing in mind the exceptional nature of the moment, it may be a good idea to think about investing in the purchase of a home in Ibiza.
Real estate advice in Ibiza
The multidisciplinary team of Ibiza Country Villas can advise you if you are thinking of buying or selling a property in Ibiza.
If you are looking for a real estate agency that deals with you in a professional, personalised and honest manner, do not hesitate to contact us.
We look forward to seeing you at our office on the Paseo Marítimo in Ibiza (how to arrive).
Original info from Idealista News.
