Loans and mortgages, interest rates never stop and leap to 4.5%. But the race isn’t over yet

MILAN. Spending on home finance continues to rise. According to the Bank of Italy surveys contained in the «Banks and money» statistics released today, in April the interest rates on loans disbursed to households for the purchase of homes, inclusive of ancillary expenses (Global effective annual rate, Taeg) stood at 4.52% against 4.36% in March.

The Taeg on new consumer credit disbursements instead rose to 10.29% (it was 10.12% in the previous month). Interest rates on new loans to non-financial corporations were 4.52% (from 4.30% the previous month).

Further increases in the cost of money are on the horizon. In the coming days, both the Fed, the US central bank, and the ECB, the central bank of Europe, will meet. Analyst forecasts are for yet other increases.

For the Eurozone, despite the disappointing macroeconomic data (Eurozone in technical recession, industrial production in sharp decline), the ECB will not change its “hawkish” position. We believe that the central bank in Frankfurt will promote at least two interest rate hikes of 25 basis points both in June and in July» says Filippo Diodovich, Senior Market Strategist of IG Italia.

For families, these decisions will lead to even higher spending. “For the most requested mortgage categories in Italy and aimed at buying a first home, the variable rates applied by the main banks exceeded 4.6% last month – analyzes Codacons – On a variable rate loan of 125 thousand euros with a duration of 25 years, the Taeg in some cases even reached 7.47% with a monthly payment of 878 euros».

«Unfortunately, Codacons’ forecasts regarding mortgage increases as a result of the ECB’s decisions are confirmed – says the president of the consumer association, Carlo Rienzi – Considering all the increases imposed by the European Central Bank starting from last year, the monthly installment of a variable rate mortgage for an amount between 125 thousand and 150 thousand euros, rose overall in May between 225 and 295 euros compared to what was paid in 2021, with repercussions on households between +2,700 and + 3,540 euros per year ” .