Mallorca holiday home owners and buyers feel relief from falling Euribor

Potential buyers of holiday homes in Mallorca and existing owners felt some relief at last after news came of the falling Euribor. The Euribor is the interest rate most commonly used to calculate mortgage payments in Spain. Holiday home owners are now expecting their mortgage rates to lower in line with these recent cuts, looking for some recovery in the Mallorcan housing market.

New buyers of Mallorca holiday homes may not see the benefits from this unless they take over an existing loan because lenders have raised the risk premiums which they charge in anticipation of higher default rates, and thus overall interest charges.

If a new buyer was to take over the loan from the current owner, they could then take over the loan and benefit from rate reductions. This is called loan subrogation and compared with new loans there are much lower costs involved.

The property market in Mallorca has been in decline for sometime now and we cannot expect things to change round anytime soon, however there is hope that the decline will slow and perhaps bottom out towards the end of 2009.

Owners of holiday homes in Mallorca for rental this summer are finding that things are slower in terms of rentals however a recent upwards trend is encouraging and holiday rentals in Mallorca for 2009 are looking more promising. Areas in Mallorca which have always been popular with visitors include Alcudia which is close to the beaches of Marina, Mal Pas and Barcares. Also a popular holiday destination and villa hot spot in Mallorca is Cala D'Or which is one of the most exclusive resorts in the Balearic Islands.