It will always cost us more to buy a house, car or take out a loan for any need in installments. Higher rates due to the fifteenth increase in the cost of money agreed on Thursday by the European Central Bank, which approved a new quarter-point increase, raising the base rate to 3.75%. It will be inevitable that interest rates will increase further in all kinds of financing. Fabi (Autonomous Italian Banking Federation) does the math in the “Mortgages and consumer credit” file.
“Italy has 6.8 million indebted households, about 25% of the total: 3.5 million of them have mortgages to buy a house – explanation from Fabi – In 2022 loan interest rates increased borrowing costs 3.75 percent Buying a car in installments, for example a 25,000 euro model, on a ten-year loan, can cost 12.7 per cent more than in 2021, 8,200 euros more”.
According to Fabi’s analysis, when it comes to new mortgages, “the monthly “repayment” of variable rate ones needs to increase by 50-60%, while the “fixed rate” installments double. For a mortgage (the average rate applied by banks can be significantly above 5%), the monthly installment will be 1,218 euros, while for a loan of 100,000 euros over 25 years, the rate will be 597 euros per month at 5.1%. While there was no difference in fixed rate ones, there were increases up to 65 percent in the installments of variable rate ones.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
