Interest rate hikes and home loans. Form
The disputed rise in interest rates by the ECB by half a point hits many Italian families who have a mortgage on their home, often their first home.
We must expect the monthly installment for variable-rate loans to rise further compared to today – explains the specialized site www.telemutuo.it.
This situation arises from the gradual increase in interest rates that began in 2022. At the beginning of the year, in fact, it was still at historic lows, as it has been for some time now.
The first interest rate to rise in the spring was the IRS index (also called Eurirs), the indexation parameter for fixed-rate mortgages. A brief slowdown was recorded in July, but then the index started to rise again: if at the end of January the 10 YEAR IRS, for example, was around 0.4%, in October it broke through 3% and now it stands at around +2.7%. Result: the rate (TAN) for a fixed-rate mortgage today starts at at least 3.5%, depending on the more or less advantageous offers of the banks.
Unlike the Eurirs, the Euribor, the most widespread index for variable rate mortgages, increased more slowly during the year, passing from negative to positive ground only in August, when it began its race to the top.
At the end of the summer, the difference between the fixed and variable rate began to gradually decrease, even if at the moment those who choose this second option (today we start from a variable rate of 2.5%) can still count on a lower installment, as it can be seen by doing a simulation with the online mortgage comparison made available by TeleMutuo.
What will be the evolution in the coming months? As we anticipated, www.telemutuo.it always writes, and as ECB governor Christine Lagarde announced, interest rates will probably continue to rise, given the uncertainty of the geopolitical scenario, and this will cause mortgage payments to rise, especially those with variable rates.
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