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Mortgages near peak, then slow decline in repayments: estimates for 2024

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Following the ECB’s decision to further increase monetary costs, repayments on both variable-rate mortgages and new fixed-rate mortgages are increasing. Until? For experts, the peak is near. But a real descent won’t happen until 2024. Some simulations.

Autumn with peak frost, still a harsh winter, then a bit of warmth at New Year’s. In summary, these are the weather forecasts for the coming months for those who have (or want to take out) a real estate mortgage. Italian families have been living with the bad weather since July 2022, when the ECB started its 10 euro cycle. rate increases: The cost of money has been raised from zero at 4.5% in just over a year.

Variable terms increased by 66%

A very rapid increase that has resulted in an exhaustion of people with variable interest loans.

Let’s take a few for example, one worth 126 thousand euros over 25 yearsdetermined in January ’22: the rate was well below 1% at the time, in January this year it was already above three, now it is above five: the monthly charge, which initially amounted to less than 450 euros, is now almost 750 , with an increase of more than 300 euros per month, equal to 66%.

Escalation continues? Maybe not. The majority of experts (a “solid majority”, to paraphrase ECB President Lagarde after the last decisive increase) expect the peak to be close, if not already reached: the Euribor futures (i.e. expectations regarding the interest rate used as a basis for calculating variable mortgages) are showing increasingly weaker growth between now and the end of the year, peaking in December at 3.90% (in short not much more than current levels), and the start of a slow, very slow decline from early 2024.

This trend reversal should bring back requests for the variable, as in recent months 95% of requests were for the fixed.

The rates for new landlines will also increase

Those who opt for fixed-rate financing (about two-thirds of borrowers) have found increasingly poorer offers from banks over the past year: to stay with the same example of a reduction: the best interest rate has gone from just over 1%, what could have happened. reached in early 2022, at 3.7%, if you look closely, today.

The advance therefore deteriorated by 166 euros. With the hope that too the EuroIRSThe interest rate to which the fixed rate is linked is destined to slow down and sooner or later stop rising. Be careful: “stopping” does not mean that interest rates will decrease. They will remain at this level much longer. How long is the big (for now) unanswered question

Source: TG 24 Sky

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