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Lepista

Greek / Spanish / Irish Etc Mortgages

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With all these failed bond auctions, and hugely increasing %'s, it can't bode well for anybody in these countries holding a elveraged asset, like.. ooh I don't know... maybe a house and a mortgage.

Seeing as this forum is about house prices, does anybody know what's happening in these places wtih respect to:

- House Prices?

- (new) Mortgage rates?

- (old) mortgage rates?

- Deposit requirements?

Might give an insight as to what is coming for the UK.

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With all these failed bond auctions, and hugely increasing %'s, it can't bode well for anybody in these countries holding a elveraged asset, like.. ooh I don't know... maybe a house and a mortgage.

Seeing as this forum is about house prices, does anybody know what's happening in these places wtih respect to:

- House Prices?

- (new) Mortgage rates?

- (old) mortgage rates?

- Deposit requirements?

- what happens to your mortgage (e.g with BOI) if the Ireland defaults

Might give an insight as to what is coming for the UK.

Not sure but I'm interesting in knowing, as well as the additional question I added above. As I almost bought a flat last year with a Post Office mortgage (BOI I believe?), what would happen if I did get that mortgage and Ireland defaulted?

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With all these failed bond auctions,

I fear you may have been misled by posters here. Spain has not had failed bond auctions recently, but they are having to pay higher interest rates as a result of the turmoil. But that's the government, not individual mortgage owners - they face other difficulties

Borrowing costs for Spain rise

The treasury of Spain sold €3.79 billion, or $5.4 billion, of 12-month notes as well as €661 million of 18-month securities, meeting the targeted amount. Borrowing costs were much higher than a month earlier, however: 3.702 percent for the one-year bills, compared with 2.695 percent in June. The yield on 18-month bills rose to 3.91 percent from 3.26 percent.

There has definitely been a fall in house prices in spain this last year, and official figures show an average fall of 25% since the crisis started. Some of us (I would hope a majority) think this is a good thing and it will allow the economy to recuperate. However, it's not so pleasant reading if you bought a property for investment purposes. What is that saying again? Buy low, sell high...

Most mortgages are based (I believe) on the Euribor rate. More info here:

Euribor current rate

A lot of mortgage statistics here for Spain

PDF file (in English)

The average value of the mortgages constituted in May decreases

6.1% in the interannual rate, standing at 119,081 euros

The number of mortgages that change conditions decreases 29.3%,

and registered mortgage cancellations decrease 10.9%

During the month of May, the average value of the mortgage constitutions recorded in the

land registries stood at 119,081 euros, a figure 6.1% lower than the figure recorded for the

same month the previous year, and 5.0% higher than that recorded in April.

In the case of mortgages constituted for dwellings, the average value was 110,032

euros, 4.3% less than in May 2010, and 2.9% higher than that registered in April 2011.

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Late 20something Portuguese couple I know are in the process of signing up for a 50 year mortgage on a ~€150k new build flat in central Portugal. Interest rate something like 2-3% AFAIK.

I'd guesstimate they have a deposit of around €20-40k after living with parents and working since university, so that would be about a €120k mortgage. Their combined net income is good by Portuguese standards, around €2-2.5k a month.

I don't think the purchase has been completed quite yet, but nobody expects it not to be. This whole arrangement is considered normal.

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Not sure but I'm interesting in knowing, as well as the additional question I added above. As I almost bought a flat last year with a Post Office mortgage (BOI I believe?), what would happen if I did get that mortgage and Ireland defaulted?

Say you borrowed £100k off the Post Office(BOI). BOI goes TU. You still owe £100k to whoever takes over the assets of the BOI RIP. No real change for you unless there is some clause in the mortgage agreement that let the new owners of the debt squeeze you for a higher payment.

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With all these failed bond auctions, and hugely increasing %'s, it can't bode well for anybody in these countries holding a elveraged asset, like.. ooh I don't know... maybe a house and a mortgage.

Seeing as this forum is about house prices, does anybody know what's happening in these places wtih respect to:

- House Prices?

- (new) Mortgage rates?

- (old) mortgage rates?

- Deposit requirements?

Might give an insight as to what is coming for the UK.

In Spain...

house prices are falling steadily. It's difficult to say by how much as they don't publish meaningful data, and of course it depends where. I've seen 40% drops from peak in coastal regions (probably more where they really overbuilt) while in Madrid I'd guess it's currently about 25 - 30% from peak.

Nearly all Spanish mortgages track the euribor annually (i.e. they get adjusted every 12 months rather than each month like the UK). In the boom they were offering rates like euribor + 0.25% I think now they are offering around euribor + 1.5%. When you consider how low the euribor is, these still aren't bad rates.

For several years the Spanish banks have usually provided up to 80% LTV (a restriction imposed by the Bank of Spain). During the boom you could get higher LTVs but had to pay higher interest rates.

There are fixed rate mortgages in Spain but they are so expensive that nobody bothers with them.

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Say you borrowed £100k off the Post Office(BOI). BOI goes TU. You still owe £100k to whoever takes over the assets of the BOI RIP. No real change for you unless there is some clause in the mortgage agreement that let the new owners of the debt squeeze you for a higher payment.

Thanks for the info Rare Bear :)

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The OP mentioned the UK. The following is an iinteresting article on the comparison between house price changes in the UK and in Spain over the last 25 years (taking figures and graphs from the Economist)

A tale of two housing booms/busts

The chart above compares nominal house prices in the UK and Spain from 1987 to the present. As you can see, Spanish house price rises exploded, up more than 600pc at the peak of the boom, before falling back to just over 500pc now. UK house prices are up around 300pc over the same period. So house prices have risen a lot in both countries over the last 25 years.

Bear in mind we are still talking about nominal prices, which are partly (but not only) driven by inflation. That helps explain why prices in Spain have risen so much more than the UK. Spain’s inflation will have been higher than the UK over 25 years.

Now look at the index over the last 10 years, a period in which consumer price inflation has been broadly similar in both countries (and historically low). Nominal prices have risen by almost the same factor in both countries, but just under 100pc.

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Since Brits started buying in Spain there have always been "forced sellers", people desperately looking to return to the UK or people who suddenly fall on hard times and need to sell their holiday home. The difficulty is finding them in the area you desire to buy in, was always the problem and still is.

Those Brits who rented and waited for prices to fall have seen drops of 30% but unfortunately this coincided with the £ dropping by the same amount against the Euro so in essence prices have remained static for them since 2007.

From what I remember pre 2008 you could only get a 70% mortgage in Spain so some form of protection against negative equity existed. I also agree that the rate was Euribor + 0.25% so IR mean that repayment on a €100k property remains at about £250, quite affordable for most people.

In inland areas new build property at the height was going for €200k (2 bed apartments) it is now priced at half that €100k. On the coast, particularly front line property the drops are less dramatic but still you are looking at 20% falls since peak.

In 2007 building work stopped in almost all coastal areas (explains 20% unemployment), this is a good thing because there was a complete over supply in some areas. Over the next 5 - 10 years the over supply will slowly balance out a little and return to norm. People are still retiring and climate, lifestyle and environment in Spain remains a draw, as life expectancy increases across Europe and infrastructure in Spain improves (care facilities, AVE etc) I cant see demand diminishing.

Edited by Einstein71

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The OP mentioned the UK. The following is an iinteresting article on the comparison between house price changes in the UK and in Spain over the last 25 years (taking figures and graphs from the Economist)

A tale of two housing booms/busts

The major difference is that you can buy a 2 bed flat overlooking the Med for £100k in Spain where as a 2 bed flat of the same size in Bradford overlooking a council estate will cost you around £150k. That is where the crazyness in the UK property market lies. Here in the South East I am sick of being shown ex council houses because this is all you can afford if you ONLY have £250k.

OK so employment opportunities are a lot poorer in Spain but if you are retired or can work remotely then frankly who cares?

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OK so employment opportunities are a lot poorer in Spain but if you are retired or can work remotely then frankly who cares?

It may seem counter-intuitive, but there are job opportunities for English speakers in Spain in specialized areas. Apart from teaching English (far more opportunities in Madrid or the north, oversupply of teachers on the costas), there are openings for Web/marketing/seo gurus. As with some other countries there is an explosion of startups, many of whom are getting funding from local government, seed capital firms and companies like Repsol and Telefonica (via Wayra). I've started a directory of spanish startups here - startup directory - and frankly I think I've bitten off more than I can chew, so many are coming to light each day. I've only really entered A-B so far, with a few others. Some of them are reaching an international customer base, and others simply need specialized web expertise. For example Busuu and BCNTouch have been advertising recently. Worth keeping an eye on the normal IT agencies out there - Infojobs.net has been the standard portal, but this site is one to peruse too - Wiseri jobs

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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