VARIABLE RATE MORTGAGES BECOMING A PROBLEM
3. Currently many Spaniards are spending over 40% of their gross income on their mortgage. In order to be able to afford the soaring prices of the recent housing boom, Spaniards have been forced to take on very large, variable rate mortgages with exceptionally long terms of up to forty and fifty years. The average monthly mortgage in April 2007 was 7% higher than the year before and had an average term of 26 years. Furthermore, of all the mortgages granted in April 2007, 97.7% were of the variable rate variety with almost 90% of those being fixed to the Euribor. This continues the trend of Spanish families becoming more overextended financially and exposed to interest rate rises.