Interest rates on mortgages highest for three years
The interest rate on mortgages rose for the eighth consecutive month in July to its highest for three years.
According to the National Statistics Institute, the interest rate on home loans for July rose 0.6 base points to 1.087%, which represents the highest level since June 2016 (1.089%).
The trend for higher interest rates was felt on new mortgage contracts signed over the past three months with the rate jumping from 1.267% in June to 1.305% in July.
“Interest rates on mortgages destined for home purchases for the total of contracts rose to 1.109% [+0.6 base points compared to June. Regarding contracts signed over the last three months, the interest rate for home loans increased 3.4 base points for the month under analysis to 1.281%” states the INE.
Taking all the contracts into consideration, the average cost of a monthly mortgage payment rose by one euro to €248. Of this amount, €49 (20%) corresponds to interest and €199 (80% to capital paid off.
For contracts signed in the past three months, the average amount of monthly mortgage payment saw a greater increase of €36 to €328.
According to the INE the average outstanding amount on mortgages rose €39 compared to the previous month, to €52,954 while for contracts signed over the past three months, the average capital amount to pay off on the mortgage stood at €100,655, up €905 on June.