Last week saw more bad news for most Spanish banks as they were yet again downgraded by the ratings agencies.
Whilst the Banks have been provided some respite by access to European Central Bank funding at reasonable pricing most are taking advantage of this and then putting the money back on deposit with the Central Bank so using the cheaper funding to help the balance sheet rather than money to lend to ease the credit crunch. This means it has had no affect on pricing with banks continuing to raise margins above Euribor.
Sabadell group have now adjusted margins three times in as many months and last week moved again from 2.20% to 2.40% above 12 month Euiribor for 70% lending. They remain however at the competitive end of the range with most others now only offering 3% plus above 12 month Euribor.
For best rates possible, which is 1.8% above, clients need to drop loan to values to 50%.
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