After the decision of the Fed , the American central bank, to raise interest rates by 0.25% , bringing them to the highest since September 2007, now comes the announcement of the ECB : the cost of money will increase by another 50 cents from today by pushing the reference rates for bank refinancing operations to 3%, the highest since 2008.
Given the pressure of inflation, the governing council intends to raise rates by another 50 basis points at its next meeting in March , as announced by Christine Lagarde. The goal, specifies the president of the ECB, is to curb inflation which in January in the eurozone began to show some signs of a slowdown, reaching 8.5%, but a value that is still far from the 2% which sets the course of the monetary policies of the Frankfurt Institute.
The Governing Council will continue to increase interest rates significantly at a constant pace and to keep them at levels restrictive enough to ensure a timely return of inflation to its 2% target over the medium term. In the light of underlying inflationary pressures, it intends to raise interest rates by another 50 basis points at the next monetary policy meeting in March, and then assess the subsequent evolution of its monetary policy.
But what are the consequences ?
MORTGAGES AND THE REAL ESTATE MARKET – Since the ECB started raising interest rates in 2022, the first effects have been evident precisely on mortgages . And above all on the monthly installments that first-time home buyers are required to pay : the variable-rate mortgage has become less convenient than the fixed-rate one, which is also more expensive.
With a rise in interest rates by the ECB of 50 basis points, the average loan installment (140,000 euros in Italy) could in particular rise up to 35 euros every thirty days . In about a year, therefore, whoever pays the mortgage could , or . And in consideration of the further increases in rates that are expected for the coming months, the mortgage could become .
