Euribor Closes May at Lowest Level in Two Years
June 4th, 2012
The Euribor, the mortgage rate quoted daily depending on the price at which money is loaned to the largest banks in Europe, closed May at 1.266%, which will mean a reduction in mortgage payments of about 730 euros per year, on loans due for review in this month.
The index marked a decrease of 0.881 points compared to the level of May 2011, when it stood at 2.147%. Compared with the previous month it dropped 0.102 points, as in April it stood at 1.368%.
With the May data, the index sums seven consecutive months of declines and is at its lowest level in two years. Taking an example of an average loan of 140,000 euros over a term of 25 years with a spread of 0.50%, families whose mortgages are reviewed in May will pay about 61 euros less than in the same month last year.
Over a full year, Spanish families will see their mortgage spending cut by almost 730 euros compared to last year.
The agency’s Governing Council has maintained or lowered interest rates in 57 of the 60 meetings in which they have decided on the price of money in the eurozone since the outbreak of the financial crisis during the summer of 2007.
Last year, they approved two rate increases – in April and in July – and two reductions – in November and December – to put the rate at the 1% it is today.
El Mundo reported that experts believe that this year there may be at least one new rate reduction, of a quarter point (0.25%), as a means to help economic recovery, even if inflation, which is currently at 2.6%, rebounds in the eurozone.
At the end of the last meeting of the ECB Governing Council in early May, and after keeping rates unchanged at 1%, Draghi again referred to the weak economic growth in the eurozone, one of the arguments put forward on other occasions in order to lower the governing rates.
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