the impact of caution on rates for mortgages

In the first monetary policy meeting of the European Central Bank of 2024, the third consecutive without increases in the cost of money, persists uncertainty on the date of a potential interest rate cut, after a slight re-acceleration of inflation in the Eurozone which reached 2.9% in December 2023, compared to 2.4% in November. The slight increase in inflation linked to energy does not appear to be of particular concern and the underlying downward trend continues thanks to restrictive financing conditions. The Federal Reserve will also express its opinion next week and, according to expectations, will also maintain a stable position.

Average fixed rates falling, variable rates remain more expensive

From October i fixed average rates they recorded a decline of 73 basis points, going from 4.08% to 3.35%, and currently on the market it is possible to find rates as high as 3.10%, and 2.70% for green mortgages. An effect that refers to the expectation of a rate cut in the near future. Also, today by purchasing a class A or B property it is possible to reduce the interest rate on the mortgage up to 40 basis points: thanks to the reduced cost and environmental impact this product is gaining more and more popularity so much so that it represented 8.5% of disbursements on in the fourth quarter of 2023. For variable rates , the situation is less interesting but in progress, with the best variable rate, decidedly more expensive than the fixed rate, which stands at 4.71%.

The average amount requested rises

The requests of variable rate mortgage in this first part of 2024 they represent only 2.6% of the totalwhile mortgages a fixed rate they make up 96.2%. Compared to the last quarter of last year, the average amounts requested increased by 8.3%, going from €129,851 to €140,692 and there is a slight decrease in the average income of applicants (from €2,968 to €2,913), positive signs for the market.

How much you save with a subrogation

In these first weeks of 2024 interest in surrogacy has returnedfavored by decrease in interest rates chargedalready anticipating an ECB cut, which has sparked a new impetus among those who have taken out a mortgage in the last year and a half and are looking to replace their variable rate. But how much do you save with a subrogation? Let’s imagine a residual capital of the mortgage of 120,000 euros, contracted with a rate of 4.20%, monthly installment of €679 and still 23 years to pay; assuming that the mortgage is extended to 25 years, moving to a fixed rate of 3.10%, the new installment would be over €100 lower (575 €/month) and you would save 15,000 euros in interest.