Spanish homeowners are likely to see their mortgage payments rise over the coming months after the nation's benchmark rate for loans, Euribor, rose 1.42 per cent in August, which could lead to more distressed properties coming to the market.

The rise marked the first increase in loan rates since October 2008 and is likely to squeeze Spanish homeowners further as almost nine out of every ten new Spanish mortgages are floating rate, reports Business Week.

Repossession orders in the nation already jumped to 27,621 in the first quarter, from 23,433 a year earlier and this upward trend is likely to continue.

"You can't expect Euribor to stay at the current low levels for ever and what really matters now is the rate of ascent," Raj Badiani, an economist at IHS Global Insight in London, told the news provider.

"The last thing Spain needs now is Euribor rising rapidly over the next year."

The troubled real estate market in Spain could provide an opportunity for property investors hoping to find a home in Murcia or find property in Balearic Islands for a bargain price.