Post the ECB base rate increase and the continuing upward trend of Euribor rates with little relief in site for the cost of the funds for Spanish Banks Barclays recently increased margins above Euribors to a minimum of 1.75% on their variable rate.
The three year fixed rate rose to 4.25% and the full term fixed to 5.95%. The three year fix still looks relatively good value for money with expectations the 12 month Euribor will rise to 3% by end of 2011. With most banks charging from at the bottom end 1.15% above Euribor to the top end of 3.9% above Euribor a 4.25% fix followed by 1.3% above 12 month Euribor at end of fixed rate remains one of the better products on the market.
Barclays affordability criteria’s makes access very difficult, with one of the lowest debt to income ratios of 30% and the current requirement that the risk teams only assess 80% not 100% of after tax income means only a handful of high earners with little or no UK debt are likely to qualify.
Maximum loan to value 65%
Santander remains currently at 50% loan to value and with the highest margins above Euribor in the market. A whopping margin of 3.9% above 12 month Euribor with low loan to value means Santander have by default extracted themselves from the lending market for non residents in Spain