Interventions by the European Central Bank affect the amount of the installments. Here is who will have to pay more and who will be able to stay calm.
The interventions of the European Central Bank on the cost of money take away the sleep of those who have turned on a variable rate mortgage. And most likely there will still be many disturbed nights, at least until summer 2023: the forecasts, in fact, speak of a substantial increase in installments due to the increases in the Euribor, which are the interbank indices taken as a reference in the calculation of indexed loans. Those who already have one will sleep much better fixed rate mortgage: absolutely nothing will change for him.
Much will depend on the performance ofinflation in the Eurozone, which will affect future interventions by the ECB on rates. At present, however, the latest move by the Frankfurt institution (the increase of 75 basis points, the heaviest since the single currency has existed) will have an inevitable impact on the next installments of variable rate mortgages, especially if attacked. toThree-month Euribor instead of the one month old.
According to the calculations published by the MutuiOnline.it website, the “average borrower”, ie the one who, for example, paid an installment of just under 450 euros in August for a loan of 100 thousand euros over 20 years, will immediately find an increase of about 80 euros to arrive in June 2023 with an installment of over 600 euros. In short, 150 euros more in less than a year, that is, approximately 35% of the increase.
Numbers, however, which may vary depending on the time left to repay the loan. It is known, in fact, that the most common amortization plans, that is those the “French” method, usually provide for the installment with the highest interest rate at the beginning and lowest towards the end. In short, to give a very simple example, if when you begin to repay a loan 80% of the installment corresponds to interest and the rest to the principal amount, that percentage drops during amortization to become much lower and, practically, to zero. towards the end. Basically, you pay more interest in the beginning. And this will be the cross of those who have just left with the repayment of the mortgage. Those who are already well under way (at least over half) will pay more capital and less interest, so the increase in the coming months will have less impact.CopyAMP code.
Other examples come from the calculations developed by Corriere.it. According to these calculations, and after the recent intervention by the European Central Bank on rates, the installment of a variable rate mortgage from 200 thousand to 20 euros anchored to the three-year Euribor will go from 965 to 1,035 euros, while for the 30-year mortgage there will be an increase of 75 euros (from 710 to 785 euros). Further increases in the cost of money could result in an increase of around one euro for each basis point of increase.