What a competitive mortgage market looks like: Spain

[Brendan Burgess]

http://www.bloomberg.com/news/artic...ge-market-is-rising-again-as-ecb-injects-cash

"Santander is now marketing a variable rate mortgage at Euribor plus 1.25 percentage points (1.41%). Bankinter offers mortgages at 1.5 percentage points over Euribor(1.66%) while ING Espana has cut its mortgage rate to Euribor plus 0.99 percentage points from ( 1.15%) 1.89 percentage points a year ago."

These are tracker mortgages i.e. they track Euribor which is currently 0.16%

Brendan

 

[partnership]

Brendan that is interesting but are they actually trackers or do they have the so called floor clause where you have to pay a minimum. Banks in Spain will not change these even though there is a supreme court decision and people who are affected have to pay thousands to take individual actions.

 

[Delboy]

Perhaps the competitive market in Spain is something to do with the high level of repossessions and the low level of arrears

[broken link removed]

http://www.irishtimes.com/opinion/cliff-taylor-crunch-time-on-mortgage-arrears-1.2147284

The US and Spain both moved quickly enough into foreclosures – or repossessions – with 15 per cent of mortgage accounts being foreclosed since 2007 in the US and more than 4 per cent in Spain. If we had foreclosures at even Spanish levels – and the crisis here was worse – some 30,000 houses would have been repossessed.
Instead the latest figures indicate fewer than 4,000 homes were repossessed by the end of last year: 1,100 via court-enforced orders and the rest via voluntary repossessions. Others will have sold under pressure from the banks.

 

[Brendan Burgess]

Delboy

That is a great graph. Really sums it all up.

The failure to allow repossessions does account for some element of the higher interest rates in Ireland. But only at high LTVs. It should have no effect at 50% LTVs where the losses due to default are close to zero.

Brendan

 

[jimmeboy]

Would a Spanish bank issue a mortgage to an Irish person (with all income from Irish sources) to purchase a property in Spain?