AGI – Rates fall, and consequently the cost of mortgages becomes ‘lighter’. The ECB’s decision will be reflected in financing for house purchases, which according to Crif, is on the rise (in the month of September alone demand recorded +19%). Considering that the ECB rate cut is completely absorbed by the three-month Euribor rate, which is the reference parameter, according to some simulations, the savings will be felt in consumers’ pockets.
For the Codacons, the cut will determine a savings, on the most common types of mortgage in Italy, between 13 and 30 euros per month. For a 20-year variable rate mortgage of an amount between 100 thousand and 200 thousand euros, the saving on the monthly installment varies between 13 and 27 euros, equal to a lower annual expense between 156 and 324 euros.
If the loan has a duration of 30 years, the 0.25% rate cut will produce an average saving between 15 and 30 euros on the monthly installmentbetween -180 and -360 euros per year.
For a 25-year mortgage of 125 thousand euros, however, a similar cut translates into a saving of around 17 euros per month, with an impact of 204 euros on an annual basis.
For President Carlo Renzi, “the third rate cut is undoubtedly a positive sign, but the road to making up for the increases imposed by the ECB in the last two years is still very long”.
According to idealista/mutui calculations, the installment for a 30-year mortgage of 200 thousand euros at a variable rate with a spread of 0.75 percent will drop from 1026 euros in January 2024 to 925 euros today – with a saving of 101 euros monthly and 1,212 euros annually. Fixed rate mortgages are also decreasing, going from an installment of 843 euros per month on average at the beginning of the year for a mortgage with a 30-year maturity and a spread of 0.5 percent to the current 792 euros, with a saving of 51 euros monthly and 612 euros annually.
