Mortgage alarm. The warning from Fabi, we are moving towards doubling the installments with the increase in rates by the ECB
In Italy there are indebted households 6.8 millionequal to about 25% of the total: of these, 3 and a half million have a mortgage to buy a house. These are the calculations of the Fabi, which after the ECB meeting on Thursday 2 February, which approved a new increase of half a basis point, bringing the base rate to 3%, has elaborated some forecasts on how interest rates could evolve.
Mortgage alarm: this is how the installment is calculated
In more detail, for a new fixed-rate mortgage from 200,000 euros at 25 years (the average rate applied by banks could be 3.9%), the monthly installment is 1,056 euros. For a loan of 100,000 euros, also for 25 years, with an interest rate of 3.7%, the monthly payment is, however, 517 euros. As for the old mortgagesInstead, no difference for those with a fixed rate, while the installments of those at variable rates have undergone increases of up to 43%. Translated: those who used to pay an installment of around 500 euros a month, today pay 715 euros a month or 215 euros more.
I new fixed rate mortgages they have gone from an average interest of around 1.8% to even over 4% with the monthly installments which, therefore, can even be doubled on the basis of bank offers. New variable-rate mortgages could soon reach an average of 3.4% from 0.6% at the end of 2021: this means that for a 150,000-euro loan with a duration of 20 years, the monthly payment will be 872 euros , a good 206 euros more (+31%) than what would have been obtained a year ago or 665 euros.
How long relates to consumer finance, iThe average interest rate, which was 8.1% at the end of 2021, could reach 11.3%. To purchase a 25,000 euro car entirely in installments, with a 10-year loan, the total cost thus goes from 37,426 euros to 42,986 euros, with an overall difference of 5,560 euros (+15%). If, on the other hand, you want to buy a 750-euro washing machine entirely in installments, with a 5-year loan, the total cost rises from 942 euros to 1,022 euros, with an overall difference of 81 euros (+8.6%).
Another example is to buy a car in installments, for example a 25,000-euro model, could cost, in the case of a ten-year loan at an 11.3% rate, more than 5,500 euros more than in 2021. As regards the new mortgages, the installments of those with fixed rates are destined to double, while for those with variable rates the monthly ‘repayment’ should rise by 31%.
Mortgage alarm: the comment by Lando Maria Sileoni, general secretary of Fabi
“There is a further risk on the horizon: in fact, in March the European Central Bank could raise rates by another half point, thus reaching 3 and a half per cent. At the same time, however, the president of the ECB, Christine Lagarde, spoke of a probable change of strategy which would lead to no longer touching rates. Better late than never, it should be said, because unfortunately Italian families and businesses pay the consequences”, comments the general secretary of Fabi, Lando Maria Sileoni
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