Due to market factors long gone are the days when non-residents buying an independent property in Spain could expect to gain rates of 1% to 1.25% above Euribor.
With the average loan rate now 2.10% above 12 month Euribor rates are over 4% and loan to values above 60% are difficult to achieve.
Banks have however held very low margins above Euribor for their own stock and increasingly are becoming more inclined to offer up to 100% or more on a mortgage to gain a sale.
Margins from as low as 0.25% are available from Banco Popular Banks. For buyers who are happy to focus solely on their stock this provides rates as low as 2.31% with loans up to 110%.
It would seem next year it is the Banks intentions to continue to tighten on loans provided to buyers sourcing an independent property as they push through the system the backlog over supplied stock they hold.
For independent sellers who are trying to sell a property they may need to rely on cash buyers only as mortgage rates increase and the banks become their main competition for buyers that do exist.
Banks do need to clear the surplus stock but the two tier mortgage availability is being used to ensure the first pickings are theirs.
Given that cost of funds means to break even in the first few years of a mortgage the mortgages rates should be around 2% the Banks will be swapping one problem for another. This will cause lower profits over next few years from the Spanish Banks.
International Mortgage Solutions