Dfter difficult and above all very “expensive” years, those who have a variable rate mortgage on their shoulders today can breathe a small sigh of relief. The ECB, the European Central Bank has decided to cut interest rates by 25 percentage points. A move, the fourth since June, which is certainly good news, but what leads us to ask ourselves what this actually means for Italian families who have to deal with their loan installment every month. How much will they really save?
ECB rate cut, lower mortgage repayment
To better understand and do the math, the analyzes of some of the main experts in the sector are very useful. According to Facile.it, for example, those with a variable mortgage will see their installment decrease by around 18 euros per month. Therefore, if today you pay an installment of 682 euros, in the next few months this will drop to around 664 euros. A modest saving which, however, becomes significant over the course of the year.
Some examples
Codacons also made some detailed calculations for different types of mortgages: for example, for a loan of 100-200,000 euros over 20 years, the savings will be between 13 and 27 euros per month (156-324 euros per year). If the mortgage is for 30 yearsyou will save between 15 and 30 euros per month (180-360 euros per year). Still, with a mortgage of 125,000 euros over 25 yearsthe savings will be approximately 17 euros per month (204 euros per year).
Sigh of relief for those who have taken out a variable mortgage with the rate cut (Getty Images)
Will rates drop further?
FABI, the Autonomous Federation of Italian Banks, offers a broader perspective, estimating that mortgage rates could fall below 3% in the coming monthscompared to peaks above 5% seen in 2023. According to the Organization, therefore, this could translate into even more significant savings: for a 25-year 200,000 euro mortgage, you could save up to 80,000 euros compared to 2023 over the entire duration of the loan.
The advantage for the variable mortgage and for new mortgages with a fixed rate
It is important to underline, as Fabi reminds us, that these changes only concern those who have a variable rate mortgage, which represents around a third of the total mortgages in Italy. Those who have chosen the fixed installment in the pastIndeed, he definitely paid more previously, but he saved a lot when rates rose really excessively. There will be advantages for those who will have to take out a new mortgage in the near future, both fixed and variable. Banks will offer progressively more advantageous conditions to those looking for a new loan.
At the moment Facile.it points out that, despite the cut in these hours, the installments still remain higher than at the beginning of 2022, when the same installment which today is 682 euros (and which will drop to 664) was only 456 euros.
Looking ahead
The good news is that this may just be the beginning of a series of reductions. In fact, the ECB no longer talks about maintaining “restrictive” rates, hinting that there could be further cuts in the coming months. A prospect that could further improve the situation for Italian families struggling with financing that has become unsustainable.
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