Rate hike, installments soar. The simulations: a car worth 25,000 euros in 10 years + 8,000 euros, a washing machine in 5 years + 118 euros, a house + 597

How much inflation “costs”, and above all how much it will cost us to buy a house or buy a TV with the tightening on rates and the increases put in place by the ECB. Fabi made some calculations and clearly the picture that emerges has very dark colors for consumers.

Interest more than doubled for fixed-rate mortgages and increases of more than 60% for variable-rate loans. This is what the ‘Mortgage and consumer credit dossier’, created by the Autonomous Italian Banking Federation (Fabi), reveals. The analysis provides an overview of the effects of the latest increase in interest rates decided by the ECB on loans to households. Those in debt in Italy are 6.8 million, equal to about 25% of the total: of these, 3 and a half million have a mortgage for the purchase of a house. And it is precisely on household loans that the new rate hike of a quarter of a percentage point decreed last Thursday by the ECB has an impact, bringing the base rate to 3.75%. As far as new mortgages are concerned – writes Fabi – the installments of those with fixed rates are destined to double, while for those with variable rates the monthly “repayment” should rise by 50-60%.

In more detail, for a 200,000 euro fixed-rate mortgage over 25 years (the average rate applied by banks could be significantly higher than 5%), the monthly installment will be 1,218 euro; for a loan of 100,000 euros, also for 25 years, with an interest rate of 5.1%, the monthly payment will instead be 597 euros. As for 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 65%. According to Fabi’s calculations, then, 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%, over 8,200 euros more than in 2021. At the end of February 2023, the total value of mortgages for the purchase of homes amounted to 426 billion euro, up by 50 billion compared to the end of 2017 (+13.5%). Out of a total of 25.7 million Italian families, those who have a mortgage are around 3.5 million, out of a total of 6.8 million citizens who are also indebted with other forms of financing, such as consumer credit and personal loans. Between consumer credit and personal loans, banks have disbursed 253 billion euros of loans to citizens, in line with the values ​​at the end of 2017, but slowing down compared to the trend of recent months, a sign of the negative impact of the rate increase of interest.

The installments of old fixed-rate mortgages, i.e. those disbursed until the end of 2021/beginning of 2022, do not change and will remain unchanged until the end of the repayment plan. The installments of old variable-rate mortgages have grown by an average of 65%: this means that those who used to pay an installment of around 500 euros a month now pay 825 euros a month, i.e. 325 euros more; it is very probable that, in the light of today’s decision, the installments of the old variable-rate mortgages could go up again. The new fixed-rate mortgages have gone from an average interest rate of around 1.8% to even more than 5% with monthly installments which, therefore, can be more than doubled on the basis of bank offers. New variable-rate mortgages could soon reach an average of 6% from 0.6% at the end of 2021: this means that for a 150,000-euro loan with a duration of 20 years, the monthly payment will be 1,090 euros. a good 325 euros more (+63.9%) than what would have been obtained a year ago or 665 euros. –

Home loan simulation

FROM 100,000 OR 200,000 EUROS

Mortgage €200,000 – fixed rate 5.3% – duration 25 years – monthly installment €1,218. Mortgage €100,000 – fixed rate 5.1% – duration 25 years – monthly installment €597. –

Car or household appliance in installments

At the end of 2021 the average interest rate was 8.1%, in light of last Thursday’s decision it could reach 12.8%: or to buy a 25,000 car entirely in installments, with a 10-year loan , the total cost goes from 37,426 euros to 45,704 euros, with an overall difference of 8,279 euros (+22.1%) compared to the rates at the end of 2021 or to buy a 750 euro washing machine entirely in installments, with a 5-year loan , the total cost went from 942 euros to 1,061 euros, with an overall difference of 119 euros (+25.3%) compared to the rates at the end of 2021.