Mortgage, better fixed or variable rate? The pros and cons for those who have to buy a house now – Corriere.it

It happens that in the weather reports we talk about thermal inversion: the phenomenon that occurs when it is colder on the ground than at high altitudes. Something similar is happening in the mortgage market: variable loans now cost a little more than fixed ones. And the parameters of the long-term cost of money decrease in value as the durations lengthen. Thus the effective rate, estimated on the basis of data as at 8 October, for the ten loans from 140,000 euros more convenient for the purchase of a house for 200,000 euros, on average for the 20-year period at 3.79% at a fixed rate and at 3.95% for the floating rate; for the thirty-year term at 3.82% for the fixed and again at 3.95% for the variable.

The offer

In the perspective of further rate increases, the preferences of those who have to take out a mortgage are returning en masse towards the fixed rate, but banks today are less willing to disburse this type of loan: if and when the cost of money begins to fall, in fact , most of those mortgages would be subrogated, while the variable does not present this problem, given that the borrower would immediately benefit from the drop in the cost of money. And, if on the one hand real estate agencies report a greater rigor in the investigationson the other there is one lower propensity to grant fixed mortgages by banks: until a few months ago lower spreads of up to 50 cents on the Eurirs were practiced compared to those applied to the Euribor, now the values ​​are equivalent.

The choice of the variable

If the fixed rate remains an understandable prudential option, it must also be said that today focusing on the variable rate makes much more sense than it did with the minimum rates. In the first years of life, a one-point increase on a mortgage that starts at 1% has a much stronger impact on the installment than it has on a loan started at 4%. Of course, the choice of the variable requires an appetite for risk combined with the certainty of being able to cope with further increases in the short term. In short, a choice not for everyone and above all not for those who take out a mortgage and are already indebted to the limit of their income capacity.