The ECB meeting will be held on Thursday and, although most analysts do not expect a rate cut, it will be important to see what signals Christine Lagarde will send to the market. While waiting for the event, Facile.it analyzed Euribor futures – which represent market expectations – discovering that installments could start to decrease between May and Junebut the drop will be modest, between approximately 14 and 22 euros for an average variable mortgage.
“The Euribor often tends to anticipate the ECB's moves and vary according to future expectations, therefore it will be essential to see what messages arrive from the Central Bank”, explain the experts at Facile.it. “The general impression – they observe – is that the decline will be slower than what the markets expected at the beginning of the year. Those with an adjustable rate mortgage will have to grit their teeth for a while longer or evaluate options such as subrogation to lower the installments”.
The analysis
For its analysis, Facile.it examined an average variable mortgage (126,000 euros over 25 years, LTV 70%) subscribed in January 2022, the installment of which reached, in February 2024, approximately 751 euros from the initial 456 euros . Continuing to scroll through the futures (updated to 28 February 2024) it emerges that the 3-month Euribor should fall to around 3% by the end of the year and reach around 2.65% by June 2025; if this were the case, the installment would drop by 67 euros by December 2024, reaching a drop of 100 euros in June 2025.
As regards the request for mortgages, analyzing those intended for the purchase of the first home, according to the Facile.it observatory, those who submitted a loan application in the first two months of 2024 aimed to obtain, on average, 136,523 euros from repay in 25 years, values in line with those recorded at the beginning of 2023. The LTV (the ratio between the value of the mortgage and that of the property) is also stable at 71%, and the average value of the property subject to the mortgage ( approximately 187,000 euros).
The only one the average age of those who applied for financing to purchase their first home is worse, increased by almost a year and reached just over 37 and a half years. The increase is attributable to the drop in the percentage weight of under 36s on the total applicants, which went from 53% in 2023 to 49% in 2024.
On the supply front, Facile.it found that in the first two months of the year the conditions proposed by the banks were overall favorable, in particular for fixed rates, with indices constantly decreasing; the best offers for a standard mortgage of 126,000 euros over 25 years (LTV 70%), start from a fixed amount of 2.87%, i.e. an installment of 589 euros; in January 2024 the best installment was 604 euros.
Variable rates, however, remain significantly more expensive than fixed ones, with the best tans starting from 4.66%, equal to an installment of 705 euros. The distance between variable and fixed rates has pushed almost all applicants, more than 9 out of 10, to choose this second option.
The decline in fixed rates continues to be an opportunity for those who want to try to take advantage of the subrogation, which in the first two months of 2024 represented a quarter of the total mortgage demand (25%), increasing compared to the same period last year. year when it was equal to 17%.
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