The ECB’s decision to raise interest rates for the seventh time in nine months does not concern only the Italian state and its 2.770 billion of debt. The cost of money at 3.75% also affects families who have taken out a loan and those who would like to do so.
In Italy there are 6.8 million households in debt, a quarter of the total. 3.5 million of them have a mortgage, sometimes stipulated with a variable rate. According to Fabi’s calculations, the installment of the latter families has grown by an average of 65%: those who used to pay around 500 euros a month, today pay 825 euros, or 325 euros more. And the latest 0.25% increase decided by the ECB is destined to further increase the disbursement.
However, the increase in rates also affects the choices of those who would like to resort to a new loan, warns the banking union. The new fixed-rate mortgages have gone from an average interest rate of around 1.8% to even over 5%, with doubled monthly installments. The new variable-rate mortgages could then reach, in the short term, on average, around 6% from 0.6% at the end of 2021. For a loan of 15,000 euros with a duration of 20 years, therefore, the monthly installment will be 1,090 euro, i.e. 325 euro more (+63.9%) than the 665 euro that would have been obtained a year ago.
The increase in financing costs is also evident on other credit products. To buy a 25,000 euro car entirely in installments, with a 10-year loan, you need 45,704 euros, with a difference of 8,279 euros (+22.1%) compared to the rates at the end of 2021. To buy a 750 euro washing machine euros entirely in installments, with a 5-year loan, the total cost goes from 942 euros to 1,061 euros, with an increase of 119 euros (+25.3%) compared to just over a year ago.
The ECB has reiterated that rate hikes are necessary to bring inflation under control. The growth in the cost of loans thus adds to the cost of living which, in the absence of wage increases, is reducing not only the debt but also the spending capacity of Italians. Moreover, according to Codacons, in 10 years the average annual expenditure for electricity, gas, water and waste has risen overall by +68.7%, an increase of 1,625 euros per family, with electricity prices which, compared to 2012 , recorded a record increase of +240%.