Mortgages, variable rates drop while awaiting ECB decisions

Last June the Central Bank reduced the indices by 25 basis points and this had a positive, albeit limited, impact on Italian variable mortgages

ROME – The ECB meeting will be held on Thursday, but it seems too early for a new rate cut. Last June the Central Bank reduced the indices by 25 basis points and this had a positive, albeit limited, impact on Italian variable mortgages; according to Facile.it’s simulations, the drop for an average loan was around 18 euros.

“The reversal made by the ECB with the first cut in June was positive, especially in terms of a signal to the market and consumers – explain the experts at Facile.it – Data available hand, however, the decline in installments was limited and looking at analysts’ forecasts, it will still take a long time for the Euribor, the reference index for variable loans, to close the gap with the IRS, the reference for fixed mortgages “.
Analysing the performance of Euribor Futures (updated to 12/7/2024), Facile.it highlighted how the installment of an average variable mortgage subscribed at the beginning of 2022, reached 733 euros in July 2024, could drop to 670 euros within 12 months, dropping by around 33 euros during the second half of the year and by another 30 euros by June 2025.

THE RATES OFFERED

The decline in variables is not yet such as to significantly affect the offer of banks and fixed rate mortgages continue to be significantly more advantageous: looking at the best offers available online for a standard mortgage of 126,000 euro in 25 years (LTV 70%), the fixed rates start from a Tan equal to 2.81%, i.e. a monthly installment of 585 euros. Even more advantageous indices for the so-called fixed rate green mortgages (for properties in class A or B): in this case the rates start from a Tan rate of 2.64% with a monthly installment of 574 euros. Such low fixed rates also represent an opportunity for those who want to try to substitute the loan; the best subrogation rates start from 2.97% equal to an installment of 596 euros (which drops to 578 euros in the case of green subrogation). Assuming the average variable mortgage taken into consideration, which reached 733 euros in July, a subrogation operation would allow the installment to be lowered by 137 euros per month.
As regards the best variable rates, however, the offers start from a rate (Tan) equal to 4.46%, with a monthly installment of 690 euros; value down compared to previous months but, as mentioned, still higher when compared to fixed rates.