(Finance) – The last six months of 2022 have been difficult for mortgages and 2023 promises to be complicated too. The responsibility goes to the ECB which has decreed a race to raise interest rates to the detriment of borrowers. In detail, the gap between variable and fixed rate mortgages continues to narrow, settling at 30/40 basis points in February. The gap is destined to shrink further since the Euribor will probably reach 3% after the latest increase in the cost of money ordered by the ECB, while the IRS seems to remain stable at the January levels. Continuing at this rate in March we could see the paradox of fixed-rate mortgages being cheaper than variable-rate ones. It is the picture drawn byMutuiSupermarket.it Observatory, the mortgage search and comparison engine managed by FairOne.
The narrowing of the gap between fixed and variable rate mortgages has a direct impact on demand which has once again polarized towards the fixed ratepreferred by 94% of online borrowers against 50% in July 2022. At the same time, the demand for substitute which in these first days of February, thanks to the decision of the ECB, has risen to represent 44% of the requests.
In this context, with fixed rates ranging between 3% and 4%, even for the youngest applicants who can benefit from the Consap guarantee, Intesa Sanpaolo has significantly reduced the rates applied to mortgages under 36 with very long duration up to 40 years, applying even lower rates than the corresponding mortgages with thirty-year duration. This manoeuvre, favored by an IRS rate curve which sees lower values as the duration lengthens, – notes the Observatory – has the objective of encouraging this segment of borrowers to obtain a fixed-rate mortgage with a sustainable installment over the time. Looking at the futures curve on the 3-month Euribor, the market expects an increase of 50 basis points already in March, as announced by Lagarde, and of a further 50 basis points in the summer period.
The peak in rates is expected precisely for 2023 and then there will be a gradual slowdown. In the middle of next year – according to the Observatory – we should see the cost of money fall to the current 3% to go below 3% by the end of 2025 and then gradually degrade towards 2.5% in 2026.
Latest February Changes – Intesa Sanpaolo introduced some innovations: fixed rate mortgages with a Consap guarantee (fixed rates reduced by 15 basis points), mortgages for over 36 applicants (fixed rates reduced by 15 basis points), mortgages for under 36 applicants without a Consap guarantee (fixed rates reduced by 55 basis points for up to 30 years and reduced fixed rates of up to 100 basis points for maturities up to 40 years); BPM desk And Webbank they increased the spread on fixed-rate mortgages from 10 to 30 basis points; Banca Popolare Pugliese increased fixed rates from 10 to 20 basis points; Sella bank cut fixed rates by up to 30 basis points; BNL it decreased fixed rates by up to 15 basis points; BPER Bank it cut fixed rates by 20 to 40 basis points.
Analysis of benchmarks – The average of the monthly surveys of the reference index for 20-year IRS fixed-rate mortgages in February 2023 remained stable at 2.63%. The minimum in the last eighteen months was recorded in August 2021: 0.26%. The analogous index for variable rate mortgages in February 2023 recorded an average of 2.52%, an increase of 0.17%. The minimum was recorded in December 2021: -0.58%.
Demand analysis on the Online Channel – At a national level, it can be seen that the purpose of purchasing has fallen to 52% of the overall total of applications with the subrogation conquering 44%. The landline still triumphs, reaching a good 94%. The under-36 age group excels at 38%.
(Photo: Gino Crescoli / Pixabay)