Florence, 24 June 2024 – I mortgage rates are falling, bringing good news both for those who already have an adjustable rate mortgage and for those who are thinking of buying a house and taking out a mortgage. The installments of mortgages, in fact, are decreasing and will continue to do so, also thanks to the latest 0.25% rate cut by the ECB. This intervention has already allowed borrowers to save between 15 and 25 euros per month. According to Facile.it estimates, based on an average mortgage of 126 thousand euros to be repaid over 25 years, the monthly installment could drop within a year from the current 747 to 692 euros.
The installment of a variable rate mortgage could in fact be reduced by 37 euros by the end of 2024 and by 55 euros in total by June 2025. In the meantime, the most convenient fixed rate has fallen to 2.60-2.65%, a clear improvement compared to the average of 3.28% recorded in 2023 by the Bank of Italy. These favorable conditions have led to an increase in requests for financing in Tuscany, which, according to data from Facile.it and Mutui.it, grew by 18% in the first four months of 2024 compared to the same period in 2023. Even the amount average demand is growing slightly, reaching 134,645 euros, with an increase of almost 1%.
In this context, what is more convenient? Fixed or variable rate? “Obviously it’s time to choose the fixed rate, which has an advantage of two percentage points over the variable. The best fixed rate today – he explains Silvano Bartolinicredit expert from Codacons Tuscany – offers an APR of 2.60-2.65%. There are also promotions at 1.95%, but they usually require the purchase of expensive life, disability or job loss insurance.”
“Even for subrogations from variable to fixed rate – continues Bartolini – it is possible to obtain an APR of 2.60%, thus guaranteeing peace of mind after a period in which the variable rate caused very high instalments”. Mortgage subrogation is a simple and free operation. If you have a current mortgage with a bank at a certain rate and you find a cheaper offer in another institution, you can make the transfer without costs, except for the mortgage tax of 35 euros. All the bureaucratic aspects of the subrogation are the responsibility of the new bank, which will take care of informing the old institution of the transfer and acquiring all the necessary documentation. The bank where you have the mortgage cannot refuse the transfer request, although it can offer better conditions to retain the customer. On the contrary, the new bank has the right to accept or reject the loan transfer request.”
Pay attention to the Taeg
The APR is the annual percentage rate of charge. It indicates the total cost of the loan, expressed as an annual percentage of the credit granted and includes interest and all other expenses, so it is useful for comparing the overall cost of the offers from different operators and deciding with peace of mind.
Ancillary costs
In addition to interests, what others expenses are they paid on the mortgage? The tax withheld immediately by the bank, the appraisal costs, the notary’s fee, registration of the mortgage, insurance to cover damages (e.g. fire or risk of death of the customer), the management and investigation of the case.
Installments at risk
It is very risky not to pay the installments. Anyone in difficulty can still contact the bank that issued the mortgage and possibly attempt a renegotiation. In certain cases it is possible to resort to public support funds, such as the usury prevention fund and mortgage suspension solidarity fund.
