(Finance) – The strong evolution of reference marks during the second quarter 2022 clearly and incisively impacts the mortgage marketboth with reference to interest rates offer, both with reference to the type of products included in the portfolio of credit institutions. In this context, more and more individuals and families are turning their attention to variable rate mortgages with POSTAL CODE.
Consequently, the fixed rate, after having explained during the last 12 months about 94% of the total preferences on the online channel, it reduces its weight and in the second quarter of 2022 it reaches 74% of preferences. This is what emerges from the CRIF Mortgage Compass – MutuiSupermarket.it on the second quarter of 2022 which underlines how the expected rise in the ECB rate is about to launch a new phase of monetary policy – in gradual inversion with respect to the expansionary policies implemented so far – which will have a direct impact on the Euribor index.
The indices of reference IRS – to which interest rates for fixed-rate mortgages are linked – shot up during the second quarter of the year, repositioning themselves on levels close to those of 8 years ago.
In particular, the 20-year IRS passed from an average 1.10% in March to an average of 2.22% in July. However, the trend of growth it seems to have temporarily stopped and the 20-year IRS, after hitting a peak of 2.58% at the end of June, is gradually stabilizing at around 2.10%. Parallel to the index Euribor 3 months in July it returned to positive territory after 7 years of negative values. Expectations in the Euro area of a sharp slowdown in the growth of GDP and the fears of recession, have significantly changed the expectations of long-term interest rate growth, consequently generating a recent fall in the IRS indices for all durations.
From the findings of the Mortgage Compass, in parallel the variable rate sees its weight increase to 18% of the total and the variable with CAP accounts for 7% of requests on the online channel. It should be noted that the growth in interest for the variable rate with CAP emerges even more clearly in June, thanks to new particularly attractive offers introduced by the main institutes banking. To date, in the current month of July, the variable rate with CAP accounts for 29% of the total on the online channel. In the light of the strong increases of fixed rates, a growing part of new borrowers therefore consider the variable rate mortgage option to be more convenient, betting on a moderate increase in Euribor rates over the next few years and at the same time leaving the door open to a future subrogation of the own variable rate mortgage towards new fixed rate mortgages.
The hike in reference rates pushes the banking system to adjust its mortgage offer. In June, the offer of mortgages young fixed rate guaranteed by Prima Casa Consap Guarantee Fund. The sharp increase in the IRS indices, which began in January 2022, prompted credit institutions to suspend this offer as the product APRs were beyond the limit thresholds communicated quarterly by the Bank of Italy, thus making the continuation of this offer uneconomical. at discounted and lower rates.
This will inevitably affect the dynamics of the request of mortgages, considering that the group of applicants under the age of 36 in the first half of the year had a driving role on the entire sector, remaining steadily above 30% of the total. However, a decrease in the weight of the Under 36 to be linked precisely to the increase in the IRS indices and the consequent suspension of the offer of young fixed-rate mortgages guaranteed by the Consap Guarantee Fund.
Against this backdrop, more and more institutions launched during the second quarter of the year new offers of variable rate mortgages with CAP, with the aim of offering lower installments but with the warranty that, as rates rise, these installments cannot exceed contractually predefined levels.