By modifying the Aiuti-ter decree, the government modified the mechanism that regulates 100% fixed-rate mortgages for the under 36s, which in recent months have almost disappeared from the market due to the increase in interest rates. But what is really changing?
How the new mechanism works
According to the latest surveys by Facile.it, at least on paper, banks will be able to start offering this type of loan again and young people will be able to access it at more advantageous rates and with monthly installments at least 100 euros lower than current mortgage loans. However, time is running out as the deadline is set for December 31, 2022.
The mechanism in force for the month of December provides for an increase in the maximum offer rate of subsidized fixed-rate mortgages through the Consap Fund. Today the ceiling is set quarterly by the Bank of Italy through the so-called Tegm (Average Global Effective Rate) which, until December 2022, will be equal to 3.20%. However, with the new regulation, taking into account the current market conditions, Facile.it estimated that the maximum threshold would be increased to 4.48%. In detail, the value was calculated to give banks more room to return to offering 100% subsidized fixed-rate mortgages to under 36s.
What is the impact of this regulation on the pockets of under 36s?
To understand the concrete impact on interest rates of a mortgage applied for by a young person under 36, the MutuiOnline.it Observatory analyzed the typical scenario of a 34-year-old fixed-term worker applying for a Mortgage 30 years from 160,000 euros for a 200,000 euro property, therefore with a Loan To Value (LTV) of 80%. The best fixed-rate offer today is 757 euros per month, with a rate of 3.93%. and an interest rate higher than 112 euros. With the youth mortgage, assuming lenders offer a 40 basis point discount similar to the current discount, someone under 36 would pay 721 euros per monthsaving 13,000 euros in interest over 30 years.
Rates continue to rise, subrogation is back in fashion.
According to data from MutuiOnline.it, the month of October saw further generalized increases in average tariffs and less evident increases in the best offers. The average fixed rate went from 3.34% in September to 3.68% in October, while the average floating rate (which was most affected by the three ECB hikes in July, September and October) went from 1.85% in September to 2.36% in October. With the comparison offers it is still possible to contain the rise in interest rates: the best variable rate (1.15%) is 121 basis points below the average floating rate and the best fixed rate (2.36%) it is 80 basis points lower than the average fixed rate. ()
