Higher rates after the ECB hike

Higher rates after the ECB hike

Mortgages, the bad news is coming for families who have entered into long-term contracts: interest rates continue to rise and so do the premiums. The European Central Bank (ECB) decided to raise the three benchmark interest rates by 25 basis points with the aim of curbing inflation. Which mortgage is more suitable today, fixed or variable rate? Let’s find out together.

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despite ofEconomic inflation He is shrink, the board of directors Determined to ensure a timely return of inflation to the 2% target over the medium term, as a result, I decided to Lifts to 25 basis points The three interest rates reference European Central Bank.

Based on its June macroeconomic forecasts, ECTS staff expect headline inflation to reach 5.4% in 2023, 3.0% in 2024 and 2.2% in 2025. Underlying indicators of price pressures remain high, although Some are showing temporary signs of abating.

It is located at about a Situation Definitely Not suitable abilities family spending. the Dear life In fact, it could last until 2025 and because of the latest rate hike, i Mortgages they will become more and more expensive. Let’s take a look at the latest increases.

The rise of the European Central Bank, and increasingly expensive mortgages: The sting for families

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According to Facile.it analysis, theIncrease interest rates It will lead to the inevitable price increase from Mortgage installment. Regarding mortgage payments with an average variable rate, they have increased by 36%, rising from €456 to €619 per month. The site, expert in comparing insurance, loans and mortgages, examined a variable interest loan of 126 thousand euros over 25 years, signed in January 2022.

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It turned out that A.S Only 12 months apartToday, the borrower pays a installments over 160 euros compared to the beginning.

Moreover, the forecasts of experts do not bode well: thatYourebot In 3 months you will reach a peak September 2023 The average considered mortgage rate would be close to 5.10%. We are talking about a premium of approximately €743, +285 € more than the initial premium.

In the context of such great change and dynamism as the current situation, where the distance between fixed and variable rates has narrowed, it is not always easy to navigate: just think, for example, that today there are variable mortgages on the market with rates higher than fixed ones. Therefore, the advice is to compare the offers of several banks and rely on expert consultants to select the most appropriate product

Facile.it experts explained.

Mortgage, is fixed or variable rate worth it?

Yet given the new increases, which one subscriber it turns out Cheaper? It is better to choose Fixed exchange rate or Factor? A fixed rate mortgage, for the time being, seems to be the best option for those who decide to take out a mortgage. With interest rates rising in May and June 2023, adjustable rate mortgage payments cost about 30% more than a year earlier.

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