As far as new mortgages are concerned, – explains the autonomous Italian banking federation – the installments of those with fixed rates are destined to double, while for those with variable rates, the monthly repayment should rise by 50-60%.
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With yet another rise in the cost of moneyfurther hikes in interest rates will be inevitable on all types of financing.
Fabi underlines this by recalling that the indebted familiesin Italy, they are 6.8 millionequal to about 25% of the total: of these, 3 and a half million have a mortgage for the purchase of a house.
The interest rate trend
During 2022, interest rates on loans are significantly increased and new increments are inevitable with the cost of money further increased to 3.75 percent.
Buying a car in installments, for example a 25,000-euro model, could cost, in the case of a ten-year loan at a rate of 12.7%, more than 8,200 euros more than in 2021.
New mortgages
As for the new mortgages, – explains the autonomous Italian banking federation – the installments of those at fixed rates are destined to doublewhile for those with variable rates, the monthly repayment should rise by 50-60%.
In more detail, for a 200,000 euro fixed-rate mortgage over 25 years (the average rate applied by banks could be significantly higher than 5%), the monthly installment will be 1,218 euro; for a loan of 100,000 euros, also for 25 years, with an interest rate of 5.1%, the monthly payment will instead be 597 euros.
Old mortgages
As for the old mortgages, on the other hand, there is no difference for those with fixed rates, while the installments of those with variable rates have undergone increases of up to 65%. The total value of mortgages for the purchase of homes amounted, at the end of February 2023, to 426 billion euros, up by 50 billion compared to the end of 2017 (+13.5%).
Of the total of 25.7 million Italian familiesthose who have a mortgage are about 3.5 million, out of a total of 6.8 million citizens indebted also with other forms of financing, such as consumer credit and personal loans.
The disbursements
Between consumer credit and personal loansbanks disbursed 253 billion euros of loans to citizens, in line with the values at the end of 2017, but slowing down compared to the trend of recent months, a sign of the negative impact of the increase in interest rates.
«The umpteenth increase in the cost of money by the European Central Bank – comments the general secretary of the Fabi, Lando Maria Sileoni – represents another very heavy boulder on bank loans and on the entire Italian economy. There are two risks: a very sharp slowdown in the real estate and construction markets and a very clear reduction in business investment, which will curb employment. Like a film already seen, the decision of the American Federal Reserve was followed by the photocopied decision of the European Central Bank».
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