March 05, 202312:31
According to Codacons, the ECB’s tightening has led to an increase in the cost of mortgages up to around 3,600 euros a year
It is very likely that the ECB will raise interest rates by 50 basis points in the meeting of March 16. This was stated by the president of the Eurotower Christine Lagarde in an interview with the Spanish publishing group Vocento. “It was a decision that we had indicated in the last meeting – she explains – and all the numbers seen in recent days are confirming that this increase is very, very probable”. For the future, the number one in Frankfurt does not say too much: “We depend on the data”.
“Banks ready to renegotiate mortgages” The president of the ECB then affirms that the European banks could launch measures to alleviate the rise in mortgage rates avoiding problems for debtors and explains: “I’m sure many banks are ready to renegotiate. It’s in their interest, they don’t want unpaid credits on their balance sheets”.
“Renegotiating is in the interest of the banks” As for a ceiling on interest rates, requested by some political forces in Spain (and in Italy ed), Lagarde replies that it is a matter “between creditor and debtor” and underlines: “I am sure that many banks are ready to reconsider the conditions of the loan. And not for charity but because it is in their interest to have healthy debtors”.
Inflation, “much remains to be done” The Eurotower number one then addresses the inflation issue, explaining that “it is still too early to declare our victory” on the price index. However, he adds that “we are making progress, even if there is still a lot to do. I know that people are suffering from inflation, especially the most vulnerable and exposed ones such as low-income retirees. At the ECB we believe that government measures should be targeted at this type of people, to be revised when energy prices fall and food prices stabilise”.
Codacons: “A mortgage can cost up to 3,600 euros more a year” “A variable-rate mortgage today costs up to +3,624 euros a year compared to 2021, while those who take out a fixed-rate loan today find themselves spending up to +3,144 euros a year compared to two years ago”. This was stated by Codacons, which through some simulations compared the offers on the market for the most requested types of mortgages in Italy, in order to understand how the decisions of the ECB on interest rates have so far influenced the pockets of families .
“In September 2021, before the series of increases launched by the ECB, for a variable rate mortgage of 150 thousand euros with a duration of 30 years, the best Taeg on the market was 0.48% with a monthly installment of 442 euros, while the fixed rate recorded a Taeg of 1.04% and a monthly installment of 481 euros – explains Codacons – At the end of February, for the same type of loan, the best offer on the market envisaged a Taeg of 3.16% and a monthly installment of 627 euros on the variable; for the fixed rate Taeg 3.15% and monthly installment of 631 euros, with an increase in spending of respectively +185 euros and +150 euros per month on 2021”.
