Rate hike, 6.8 million households in debt: variable mortgages rise up to 70%

How many mortgages are disbursed by Italian banks? And how much is consumer credit? How many households are in debt? And how have the installments of the various types of financing changed in the light of the increase in the cost of money by the European Central Bank to 3.5% in recent months? After the ECB meeting on Thursday 15 June, which approved a new increase of a quarter of a percentage point, bringing the base rate from 3.75% to 4%, here are some data and forecasts on how credit to households has changed in the our country and how interest rates could evolve. With this umpteenth rise in the cost of money, further increases in interest rates on all types of financing will be inevitable. This is what emerges from an analysis by Fabi entitled, “The increase in interest rates decided by the ECB and the effects on loans to households”. There are 6.8 million indebted households in Italy, equal to approximately 25% of the total: of these, 3 and a half million have a mortgage to purchase a house. During 2022, interest rates on loans have increased significantly and new increases are inevitable with the cost of borrowing further increased to 4 percent. Buying a car in installments, for example a 25,000-euro model, could cost, in the case of a ten-year loan at a rate of 12.7%, more than 8,200 euros more than in 2021. As regards new mortgages, the installments of those at fixed rates are destined to double in the course of 2023, while for those at variable rates the monthly “repayment” should rise by 55-65%. In more detail, for a 200,000 euro fixed-rate mortgage over 25 years (the average rate applied by banks could be higher than 6%), the monthly installment will be 1,304 euro; for a loan of 100,000 euros, also for 25 years, with an interest rate of 5.3%, the monthly installment will instead be 609 euros. As for the old mortgages, on the other hand, there is no difference for those with fixed rates, while the installments of those with variable rates have undergone increases of up to 70%.