Mortgage, rising rates: installments of 159 euros more per month. What’s to know

The increase in interest rates does not subside and this inevitably affects mortgages for the purchase of a house and the request for loans and financing from credit institutions.
The rate on new mortgages recorded in February (4.12%) had not been seen in Italy since mid-2012. This is what can be deduced from the Bank of Italy tables. At the time, the level had exceeded the 4% threshold at the beginning of the year and then fell over the following months, continuing to fall with the start of the ECB’s policy of zero rates. At the end of 2021 then came the sharp turnaround.

A rise in mortgage rates in February which represents “a sting” of 159 euros more per month for Italian families than a year ago. This is what the National Consumer Union affirms, commenting on the Bank of Italy data on interest rates on loans granted to households for the purchase of homes including ancillary costs (Taeg). “Not only in a single month will rates rise from 3.95 to 4.12, +0.17 percentage points, but compared to February 2022, when they were at 1.85, they have taken off by 2.27 percentage points” says Massimiliano Dona , president of the Unc. “Considering the amount and the average duration of a mortgage, such a substantial rise in interest rates means that the installment, for those who have now taken out a variable-rate mortgage, increases, compared to a year ago, from 585 to 744 euros, with a price increase of 159 euros per month, an annual blow of 1,908 euros” concludes Dona.
Deposits are down, loans are up
In February private sector deposits decreased by 2.4 per cent over twelve months (-1.8 in January); bond funding increased by 3.9 per cent (0.7 in January). This was announced by the Bank of Italy in the update of ‘Banks and money: national series’. Loans to the private sector, adjusted on the basis of the harmonized methodology agreed within the European System of Central Banks (ESCB), grew by 1.1 per cent over twelve months (1.6 in the previous month), while loans to households increased by 2.5 per cent on an annual basis (3.0 in the previous month) while those to non-financial companies decreased by 0.5 per cent (the annual rate of change was zero in the previous month) .