Interest rates, new increase for the European Central Bank? Consequences for the mortgage

There is uncertainty over the European Central Bank’s decision to raise interest rates again to curb inflation. A decision that would lead to a new increase in variable rate mortgages. In fact, as MutuiOnline.it asserts, “The recent escalation of the Israeli-Palestinian conflict, and the consequent increases in the costs of some raw materials, puts… Inflation that falls within the 2% target is at riskAlthough Eurozone inflation data for September (+4.3%) was noticeably lower than August (+5.2%). Moreover, Powell said so yesterday Inflation in the United States is so high that other interventions will be necessary To slow down the economy. In this context, it is difficult to determine how the ECB will assess the prospects for the health of the European economy during its monetary policy meeting on Thursday and what it will decide about the development of reference rates.

According to estimates, in the event of a further increase of 25 basis points, the mortgage installment with a variable interest rate of 160 thousand euros over 20 years would rise from the current 1037 euros to 1057 euros, that is, 20 euros more than today and €363 more (+52.3%) compared to January 2022. The increase is most pronounced over the 30-year period, where, again, for a mortgage of €160,000, the installment will rise from the current €838 to €860, i.e. €388 more than in January 2022 (+82.2%).

“We hope – comments Nicoletta Babucci, Marketing Director at MutuiOnline.it – ​​that the ECB is consistent with what was announced in September and decides to stop the increases, but the performance of the economy in Europe and Europe cannot be ruled out. Abroad and recent developments, geopolitical forces have pushed Christine Lagarde needs to make a different choice.Another increase in rates would put it even harder for low-income families who have already seen variable-rate mortgage payments rise by more than 50% in a year and a half. Advice for those who want to take out a new mortgage is to opt for a fixed rate guaranteeOr which, according to our monthly monitor, has a best TAN of 3.5% and an average TAN of 3.90%. In the future, if the situation returns to normal as we hope, it will always be possible to replace by choosing a more suitable offer.”