Mortgages, everything is changing now: beyond the interest rate hike

The time of the Taxi On mortgages ai Historic bottoms It is about to expire and expectations for the next few months are far from encouraging.

As stated in a previous article de IlGiornaleIn fact, since last September, there has been a slow but steady rise in reference rates and as bond yields have recovered, mortgages have also started to slowly rise. Partner could be the rebound recorded in overseas markets, as the ten-year TNote yield in the US jumped over 1.6%.

In the “old continent”, indicators remain slight, resulting in increases that do not particularly affect household portfolios; However, in the coming months – perhaps thanks to a return to inflation – rates will likely continue to rise, permanently closing the “historic lows” era that characterized 2020.

For the time being, as highlightedABI (Italian Banking Association)In any case, the average gross loan rate decreased from 2.26% in January to 2.24 in February, and by 4 percentage points lower than in the pre-crisis period (2007), where the rate stood at 18.6%. If the plus sign has not yet been “generalized” on interest, the effects have had a special effect – at least for the time being – on the fixed rate with longer maturities, that is, those between 20 and 30 years; However, these types of mortgages are the most prevalent, affecting about half of all transactions with banks, and thus represent a sign that should not be underestimated.

Regarding variable rates, however, everything remains stable with the Euribor at 1 or 3 – the traditional benchmark for variable mortgages – months that do not move from the values ​​recorded in the past few quarters, and remain at a negative value of half a percentage point.

So, while the three-month Euribor is not “moving”, Eurirs continues to show signs of recovery – meaning a plus sign of interest – with a rise – from the start of the year – by 41 basis points on the index to 20 years and 48 basis points at maturity. Mortgages at 30 years, which is a period of time after which banks, as a general rule, do not disburse the loan.

According to experts, an increase in fixed rate interest (which accounts for about 90% of mortgages that were spent in recent years) could replace competition at a variable rate, which has remained below 0.5% since last October, could become very palatable with One Spread Between the two categories, which exceeded 30 basis points.

What does this sign mean?

On the headAcer (Association of Building Builders of Rome and Province) Niccol Repiccini:The rise in interest rates is not a negative sign because it shows that the markets believe in the recovery of our country’s economy“;”Certainly the downside – A representative of the Manufacturers’ Association continues – It is that those who contracted or must contract debt may have less favorable consequences“.

In fact, as interest rates rise – at least those that depend on a constant rate – they rise, at the same time, the trend of demand for mortgages and new solutions – and it is clear that the data are linked together In fact, in the first quarter of 2021, there has been a shift in mortgage and substitution applications by Italian families.

From the analysis of the requests registered on Crif Credit Information System There was an overall increase of + 9.6% compared to the corresponding period in 2020. Crif notes that after the start of the year with the handbrake, following the negative trend of the fourth quarter of 2020, the positive in the entire quarter was attributed to the growth recorded in March (+ 55.8). %), But on condition of comparison with the corresponding month of 2020, which witnessed a significant paralysis of operations due to the total closure launched by the government to contain the first wave of the Coronavirus epidemic.

Mortgage applications

At the first quarter level, the total number of discovered applications in absolute terms was the highest in the last 9 years. Moreover, another encouraging sign is the increase in the average required amount, which registered + 2.6% compared to the corresponding period in 2020, to reach 136,656 euros. Also in this case it is the highest value since 2013 until now. Regarding the distribution by amount range, in the first quarter of 2021, requests for sums ranging from 100,000 to 150,000 euros represent the preferred solution for Italians, with close to 30% of the total, a figure which is broadly in line with the corresponding period of 2020. In second place (At 25%) the denomination of amounts remains between 150,000 and 300,000 euros.

“An increase in rates can also affect families who have already bought or are about to do so – Rebecchini continues -; Therefore it will be very important, especially in a sensitive moment like the present one, to support families in buying their own home, whether it is renovated or newly built, but in any case anti-earthquake and low energy consumption, and to strengthen and refinance the guarantee fund of the already existing state.“.