June 2006
You're watching the articles of Euribor for the month of June 2006.
A summary of news:
- The mortgage market has been able to reach its ceiling.
- In an environment of rate increases, lengthening the repayment period of mortgages is useless.
- The banks have to gamble less.
Banks and savings banks have made their jump alarms before the unstoppable advance of the housing market and excessive borrowing by Spanish families.
The Spanish Mortgage Association (AHE) has Afrim that the current model of contracting such loans are exhausted and do nothing but increase the already excessive dependence on the Euribor. If it joins the huge volume of credit alive, believes that the risk to the economy is evident. Therefore, it required the Government to speed up the legislative reform promised in March, with a more flexible and cheaper to change the contract.
In a tough speech, the president of the AHE, Gregorio Mayayo, reviewed data from 2005, a year that were granted mortgages valued at 739,296 million euros (81.75 a GDP), of which 475,570 million were requested by families. Record numbers once again. The number of contracts grew by 10.9% year contract and half are strongly by 13% to 124,589 euros. Today this ratio is already in excess of 138,000 euros.
Until now, the system has endured well, based on low interest rates, lengthening the time limits and increasing the percentage of the price of the flats provided by the entities. Something that has enabled a large population of limited access to housing. "It is possible that this model of mortgage financing is running out," he warned.
Mayayo revealed that compared with an EU average of 53% in Spain is only sign a fixed term to 0.62% of total mortgages. A reality-driven 'laws and pressure from some official institutions, "he said.
The mortgage debt to add 82% of GDP and that the monetary policy decided by the European Central Bank and not the Spanish, he recalled, "who has done most analysts valued it as a real threat to the national economy." The deadlines are not banks and stretching more boxes and no longer dare to give amounts far above a limit on the price of houses. The most exposed, he said, which was signed between 2003 and 2005.
Thus, the AHE recommended reducing exposure to the Euribor contracts with more variety. He asserted that it is necessary, since the law, enhancing the advantages hedge against new-types and services compared to the widespread formula that the lower interest is the best.
Written by Carlos Lopez on June 29, 2006 with 4 comments
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Today we have informed the data of consumer confidence in Germany and Italy with better results than expected. This would mean that the economy is improving in both countries with the danger of inflation that would entail. We do not know if the ECB was aware of these facts, but yesterday was very hard insinuating that in August could raise interest rates 0.5 points.
It seems that Europe is doing well, thus, mortgages could go worse, so definitely if you go to hire one, you should think of a fixed-rate mortgage.
Written by Carlos Lopez on June 27, 2006 with 3 comments
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The president of the European Central Bank (ECB), Jean Claude Trichet, appeared today in the European Parliament. The banker claimed to MEPs that growth and inflation in the euro zone remain strong, thus leaving the door open for future increases in fees.
"Economic growth is widening and becoming increasingly sustainable," said Trichet before the committee for economic and monetary affairs of the European parliament. At the same time, he noted that "inflation will remain high in coming years," that interest rates "remain low" and that monetary policy in the euro area remains accommodative. "
Faced with this situation, Trichet EU moved to the camera that "continue doing whatever is needed to contain inflation and to anchor inflationary expectations."
At the last meeting of the ECB, which was held in Madrid and in which rose 0.25% the price of money up 2.75%, Trichet has already suggested that there would be further increases in rates in the future. "If our forecasts for growth and inflation are confirmed, it will be necessary to reduce the laxity of monetary policy," Trichet said.
The futures market on the Euribor two other discounted rate increases: one at the end of August, and another 3% in December, up 3.25%, and further increases in 2007, reaching 3.5% or 3.75%.
Recall that mortgages are often Euribor.
Written by Carlos Lopez on June 22, 2006 with 6 comments
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One of the urban legends (and even published in some media) is the way to fight the high price of housing mortgages to "heritable" of 75-100 years. This possibility is completely ruled out in an economic environment like the present.
Let's see some examples, why not get these mortgages.
Consider, € 350,000 mortgage at 4%.
40 years -> € 1462.78 per month
50 years -> 1.350 €
60 years -> 1283 €
75 years -> 1228 €
100 -> 1188 €
1000 years -> 1166 €
Savings of 162 € a month if the raisins from 50 to 100 years
5% interest
40 years -> 1687 €
50 years -> 1589 €
60 years -> 1535 €
75 years -> 1493 €
100 -> 1468 €
1000 years-> 1458 €
Savings of 121 € to move from 50 to 100 years
6% interest
40 years -> 1925 €
50 years -> 1842 €
60 years -> 1799 €
75 years -> 1769 €
100 -> 1754 €
1000 years -> 1750 €
Savings of 90 € to move from 50 to 100 years.
An interest rate of 6% Euribor supposed to 5.3 (Summer-Fall 2000) and apply a differential of 0.7.
Do you think it is worth mortgaged over 50 years, to save around 10% in the monthly fee?
Written by Carlos Lopez on June 22, 2006 with 26 comments
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Everything suggests that in July they will turn to expensive mortgages since today, for the first time in many years, the Euribor has exceeded 3.4% following the upward trend that possibly lead to 4% by year-end.
A year ago the Euribor stood at 2091%, very close to the historic low.
Written by Carlos Lopez on June 21, 2006 with 14 comments
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La Caja de Ahorros y Monte Piedad Cordoba of, CajaSur, "in its commitment to meet the demand of society", has launched a mortgage that provides "excellent conditions", the "Mortgage Light ', in force for their entire extended office network until the end of 2006.
According to the financial institution through a communique, "the 'Mortgage Light' comes with a spectacular presentation letter: Euribor + 0.40, with minimal linkage can subscribe to any of the offices of the Savings and Mount Piedad Cordoba. "
The 'Mortgage Light' is intended for all individuals, not customers and clients CajaSur, going to buy their first or second home. With this product, the Savings Bank Cordoba "is positioned as one of the concerning financial institutions in the mortgage market."
Written by Carlos Lopez on June 21, 2006 with 2 comments
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