August saw the first; all be it small; Euribor ( European Interbank offered rates) rise for 12 months.
The level of Euribor rates which has been at a historical low for many months is predicted to rise by about 1% over the next year. It was unrealistic to believe the rates could remain as low as they have been and increases should be gradual.
In itself, a 1% rise may not cause existing borrowers or new borrowers too many problems increasing payments by € 50 per month for every 100k borrowed on a 20-year repayment loan. Given however the fragility of the Spanish Economy and the high existing rate of defaults the Spanish Banks are experiencing it must be hoped that increases do not exceed the anticipated 1% increase and that Euribor base rates then level out at around 2.40% rather than continue to climb.
Given the trend is however for rate rises when looking for a loan considering a fixed rate above current variables could be a good option to hedge against where rates will finally peak.