2023-08-15 11:40:40
Italian homebuyers and homeowners are currently on high alert amid growing concerns about rising mortgage interest rates. However, the challenges in the mortgage industry do not end there. Starting in September, other changes are expected that could significantly affect mortgage credit in Italy.
Forecasts from September
The mortgage landscape is currently under increasing pressure due to expectations of higher interest rates. This can translate into higher monthly payments, putting pressure on Italian family budgets.
The Italians face a complicated panorama. In addition to rising costs in the food, insurance, education and fuel sectors, another enemy looms: mortgage cost overruns. And starting in September, both variable-rate and fixed-rate mortgages could experience significant increases.
The economic situation, already precarious due to high interest rates, threatens to bring many families to their knees. An increase in mortgage payments could hit the local budget, while the purchasing power of wages continues to fall.
Experts warn that variable rates will rise in the coming months. It seems that the 3-month Euribor, an important variable rate indicator, currently at 3.77%, is set to align with the ECB rate in the next 2-3 months. And a rise in the ECB rate to 4.25% in July increases the tension.
But it’s not just floating prices that are in the spotlight. Even fixed-rate mortgages, which are stable to begin with, are showing signs of rising. The IRS, which affects fixed-rate mortgage rates, rose about 10 basis points. If this trend continues, we can expect increases in fixed-rate mortgages starting in September.
Shadow tax on fringe benefits
The government’s decision to tax excess bank profits added to uncertainty. The measure is expected to limit access to credit. According to the Bank of Italy, in the second quarter, the number of operators who struggled to obtain a mortgage increased by 0.8%, to 30.9%. This level is the highest since 2014.
Banks are not the only ones in crisis. There are fears that banks could reduce the availability of credit due to the windfall tax. This can make it even more difficult for families and companies that need financing for their projects.
advice
At a time when financial education is more important than ever, it is critical that homebuyers and homeowners be prepared for these challenges. Here are some tips that can help you:
Check your financial situation: It is essential that you understand how much you can afford in terms of monthly payments, especially in the context of possible price increases. Consider Fixed Rates – If possible, it may be time to consider switching to a fixed-rate mortgage, to protect against future fluctuations. Consult financial experts: Talking with a financial advisor can help you plan accurately and make informed decisions.
Against the backdrop of rising lending rates, both for homes and businesses, and declining deposits, Italy’s economic outlook is becoming increasingly uncertain. Staying informed, planning wisely and seeking financial advice are vital in dealing with this turbulent economic climate.
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