“Rising Mortgage Rates and Consumer Protection: How to Navigate the Current Market”

Hard news on the mortgage front and consumer protection associations sound the alarm.

Mortgages continue due to ECB rate hikes. The interest rates of the European Central Bank impact the money that banks lend to each other and lending to customers. Lately the Central Bank has increased the cost of money several times amidst a thousand controversies. This did increase the Euribor and consequently mortgages are increasingly expensive.

Anyone with a variable rate mortgage is in the eye of the storm because in the last 12 months the rate has grown without respite. Those who have a fixed rate have nothing to fear but for the variable rate the installment has almost doubled in a short time. Among other things, even taking out a fixed-rate mortgage becomes more expensive because they’re up about 60% from a year ago.

Which mortgage is convenient and what is expected

Let’s try to understand what is convenient today between a fixed rate and a variable rate. With the fixed rate you will pay definitely more at power up of the mortgage but you will have the certainty of one installment that does not change. However, experts argue that the installments in the coming years could go down because the inflationary fire at some point it will run out. So today you probably take out a mortgage at a fixed rate globally it is not convenient.

Taking out a variable rate mortgage means having to absorb the next price increases and sadly apparently until mid-2024 the installments will continue to increase. It is not easy to understand today what to choose among the various solutions but the experts continue to advise the mortgage with cap because it puts a stop on the upside but allows for take advantage of any interest rate declines. With this instrument there is always the possibility of extending the duration of the loan if rates go up again.

Situation of families increasingly precarious

Unfortunately, however, according to the latest surveys, many families are not making it keep up with the payment of the installment and also trying to take advantage of mortgage renegotiations and subrogates, foreclosures are unfortunately around the corner. When the family doesn’t make us pay bank is rivaling the property itself and this is a drama that risks affecting many families today. The marked inflation and the increase in the installment are making the installment pay late.

Even families that were always be punctual today they begin to arrears in payments and the risk is that of exceed the permitted tolerances from the bank or institution and risk the house.