This week has seen the markets in turmoil.
The downgrading of a number of Spanish Banks, Spain itself and the previous weeks downgrading of a number of UK Banks who lend in Spain has seen a very quick increase in margins across the board.
Even Banks like Barclays who missed the downgrades this time round have increased their variable non resident rate from 1.95% to 2.35%.
By far the biggest impact on the Spanish market of the downgrades as it relates to foreign buyers is Lloyds moving minimum margins from 1.5% to 3%. As the last interest only lender to gain 5 years interest only with Lloyds now costs a massive 3.80% above Euribor.
Changes are immediate with only full applications received in full by 21st October having the old rates held.
Against this backdrop the good news seems to be that for their own stock Spanish Banks are absorbing increases in costs.
Banco Popular will offer 0.25% above Euribor for first year followed by 0.50% and Sol Bank are offering 0.60%. With funding up to 100% available at such keen rates Bank owned property is looking good to offer on. Yearly interest costs from the normal 4% Sol Bank rate to their bank owned rate means for every 100k you borrow you save € 1.344 per year in interest payments.
