Lower outstanding variable mortgage rates, better rates for financing and loans to be requested from now until the next few months. And a cost to refinance public debt, first and foremost that of Italy, which is decreasing as already highlighted by the trend of the spread, to the lowest level in the last three years. The decision of the ECB to cut the cost of money by 25 points, given the slowdown in inflation, has a series of effects, both immediate and in the medium term, on citizens, businesses and governments.
Lower current mortgage rates
Variable-rate mortgages without caps in Italy are now a minority. Of the total 423.4 billion issued, about a third, 144 billion, are variable-rate and the remaining 279 billion are fixed-rate. But for those who still have such financing, the ECB's decision lightens an instalment that had skyrocketed in recent months . The instalments of old variable-rate mortgages have grown by up to 78%. As a Fabi analysis points out, for a 150,000 euro loan lasting 20 years, the monthly instalment is 1,180 euros, a good 515 euros more than what would have been obtained two years ago, or 665 euros. Now the saving will be about 20 euros per month and is destined to increase in the event of further cuts.
New, more convenient loans
Market indices and bank offers had already anticipated the ECB decision. Rates have therefore already fallen in recent weeks and will fall further in the coming months. For Mutuionline.it, the variable rate is offered at an average Tan of 4.33% with peaks of up to 3.86%. The average could drop to 4.08% in the coming days and even more during 2025. If the ECB were to continue with these choices, the variable rate would reach the fixed rate which on average now travels at 3.06% with peaks of up to 2.7%.
Breath for investments
The analyses of the ECB and the Bank of Italy indicate a low demand from businesses due to the economic stagnation and consequent reduction in loans that has lasted for several months. However, high rates have also played a role in slowing down investments that now, with better monetary conditions, could recover.
Falling government bond yields
In the next auctions the Treasury will show lighter coupons to refinance the debt. The average yield measured by the Bank of Italy in October was 3.154 with a maximum of 4.049 for maturities over 20 years. On the contrary, the values of the securities in circulation on the secondary market could rise.
Stock Markets
The consequences on the price lists of a more accommodating monetary policy are difficult to predict. Too many variables, both financial and geopolitical especially in a moment like the current one characterized by very high uncertainty.
(Online Union)
