A variable rate mortgage, whoever stipulates it is going to have a bad time: how much will the increases be

A variable rate mortgage, whoever stipulates it is going to have a bad time: how much will the increases be

Citizens with adjustable rate mortgages are going to have a very bad time. The new hike in ECB rates will lead to an increase in interest rates.

Let’s find out how much the monthly payment will increase with the variable rate mortgage due to the new increase by the European Central Bank.

Variable mortgage, concern among citizens – Ilovetrading.it

2023 is proving to be a bad year economically. We will also emerge from the pandemic emergency, but the war in Ukraine is still having repercussions on the finances of Italian families. The reality of conflict so close to our nation has serious social, psychological, political and economic consequences. To make sure that in 2023 two countries can still go to war to resolve disputes is to learn nothing from past history.

As cities collapse and men, women and children perish, Italian families have to do the math in their pockets as inflation weighs dangerously heavily on their shoulders. The European Central Bank continues to raise the cost of money and that means another hit for those who took out variable rate mortgages. In just a few months, the premiums have increased by an average of 300 euros, which is disproportionate and unsustainable for many families. And the worst is yet to come.

Variable rate mortgage, hit by the European Central Bank

On May 4, the European Central Bank announced a new increase in the cost of money by 25 basis points. This brings the total increase to 300 since June 2022. As a result, rates have increased to 3.32%. It’s been almost ten years since there were highs big enough to convince many people to get into a variable rate contract rather than a fixed contract.

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The European Central Bank raises interest rates – Ilovetrading.it

Until February 24, 2022, the floating rate was very favorable. But now, Russian Roulette is ready to carry out a massacre. In recent months, the European Central Bank has found itself forced to raise interest rates to combat hyperinflation. The cost of money is becoming increasingly high in order to allow the return of excess liquidity but who cares about holders of variable rate mortgages? No aid came from the government or from banks who take advantage of the situation to increase profits.

It becomes difficult, then, to apply for and obtain a loan. To support a large premium, you must be paid an exorbitant salary or the institution will reject the application. And who can support the monthly expenses of 800 euros?

We have reached an estimated increase in increments which translates to around €237 more than the monthly mortgage payment. 52% increase in one year. The dizzying increases that cripple the real estate market and in small towns lead to the collapse of the sector. The only solution for those with a variable mortgage is to ask for solutions or renegotiations with the hope that the proposal will be able to reduce the monthly encumbrance.

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