The long-awaited rate cut, after ten months of calm, is still at most a month or two away, unless there is a sensational turnaround. However, something is already moving, to the delight, so to speak, of those who have a mortgage. In fact, in March, interest rates on loans granted during the month to families to purchase housing, including ancillary expenses, stood at 4.21%, compared to 4.31 in February. The proportion of these loans with an initial rate determination period of up to one year, clarified the Bank of Italy, was 14% (17% in the previous month).
Thus, the interest rates on new loans to non-financial companies were equal to 5.26% (5.34 in the previous month), the rates for amounts up to 1 million euros were equal to 5.73%, while the rates on new loans for amounts exceeding this limit stood at 4.95%. Finally, active rates on all deposits in circulation were equal to 1.04% (1.02 in the previous month). Consumers can only breathe a sigh of relief.
«Well, the drop in tariffs that began in December continues in March» commented Massimiliano Dona, president of the National Consumers Union. In short, a breath of fresh air is coming for families with variable rate mortgages. Considering the value and average duration of a housing loan, the drop in rates means that the installment, for those who have already taken out a variable rate housing loan, will fall, compared to the peak in November 2023, by 56 euros per month, equal to to the annual value. savings of 672 euros.
Now all eyes are on the ECB (led by Christine Lagarde in the photo) and the June Board of Directors. The signs are all there. At the meeting of the 10th and 11th of April of the monetary board it was in fact considered “plausible that the Council will be in a position to start easing the monetary restriction at the June meeting, if new elements received by then confirm the medium-term perspectives on inflation indicated in the March estimates”, report the minutes of the meeting, further cementing the prospect of a first rate cut by the ECB at the meeting on 6 June. The minutes reiterate that “new important data, including updated technical forecasts, will be published for the June meeting, allowing the Governing Council to make a broader assessment” of the framework.
Source: IL Tempo
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.
