(Finance) – How will the ECB during the meeting of the September 14th? The experts from Facile.it and Mutui.it have analyzed the two scenarios deemed more probable; on the one hand the hypothesis that the European Central Bank takes a break from increases, which would translate into a stop to the increase in variable mortgage installments; on the other, the hypothesis of a further increase of 25 basis points, which would bring the installment of an average variable rate mortgage* to close to 760 euros, i.e. 66% more than at the beginning of 2022.
The wait grows if we consider that even according to the Futures on Euribor – which represent the market expectations – the peak is now upon us: although expected for December, the maximum point of the index in question is given at 3.90% but today it is already at 3.80%. The distance, therefore, would be less than the hypothetical increase of 25 basis points by the ECB. From January onwards, the index should, albeit very gradually, begin to decline again.
For the analysis, Facile.it and Mutui.it took as reference a financing to variable rate from 126,000 euros with a 25-year repayment plan signed in January 2022 and examined how the installments have grown from the beginning of last year to today and how they could vary again in the coming months.
The starting rate (TAN). in January 2022 it was equal to 0.67%, corresponding to a monthly installment of 456 euros. Following the various increases in the cost of money implemented by the European Central Bank to combat inflation, the mortgage rate examined rose significantly, reaching 5.05% in September 2023, with an installment of around 740 euros. Today, therefore, the borrower finds himself paying almost 285 euros more (+62%) compared to the initial installment in January 2022.
Assuming that on 14 September the ECB decides to continue in the wake of the decisions taken so far and announces a further increase of 0.25%, the monthly installment of the analyzed loan could even reach 759 euros, with an increase of 303 euros compared to the initial one (+66%). If, however, the European Central Bank will opt for one stopthen there should not be major variations on the installment front, it being understood that the Euribor moves based on the expectations of the ECB rates, but it is not certain that it does so in a mirror-like manner.
Looking at market expectations (Euribor futures updated to 11 September 2023), as mentioned, from now to the end of the year the Euribor index should continue to grow, although to a lesser extent than in the past so much so that the peak expected for December 2023, when it will reach 3.90% is not much higher than the current values of the index. If this happened, the average mortgage rate examined (Euribor3m+1.25%) would reach 5.15%, with an installment of approximately 748 euros, or over 292 euros more than that of January 2022.
There is good news though; with the start of the new year the trend should finally reverse itself so much so that, looking at the prices of June 2024, the mortgage rate analyzed is expected to fall to 4.92% and then even reach 4.28% in June 2025.
Still no extension of facilitated warranty conditions up to 80% for i mortgages Before home intended for young people, whose deadline is scheduled for September 30th. Since it was introduced in 2021, the measure has allowed numerous Under 36s to access advantageous conditions for taking out a first home mortgage, so much so that – according to the analysis by Facile.it – if in the first half of 2021 applicants with less than 36 years represented 43.4% of total requests for first home mortgages, between January and June 2023 this value reached 51.3%.
“It would be desirable for the Government to once again extend the validity of the relief in favor of young borrowers, especially in such a delicate economic context, characterized by price increases and increases in rates”, explain the experts at Facile.it. “The ones who would suffer from the possible choice not to extend the initiative would be the young people themselves, who would have – in fact – less chance of buying a house. The hope, therefore, is that the measure will be extended not only to the end of 2023, but also in 2024 and with an expiration no longer quarterly”.
(Photo: Tierra Mallorca on Unsplash)