The first, historical increase in interest rates of the last 11 years established by the ECB on 21 July could have tangible effects on our portfolio. Above all, they could be paying the price of what was established by Frankfurt to try to contain the increase in inflation citizens who have taken out a mortgage: the rat, in fact, could go up to 50 euros per month.
The ECB effect on mortgages
Frankfurt has decided on a monetary tightening of 0,5%. The rate increase has a tangible effect on the cost of money, without taking into account the fact that, given that banks will pay more to borrow money from the ECB, the loans and mortgages that institutions will grant to businesses and citizens will also become more expensive.
Mortgages: installments on the rise
The first effects of the rate increase could be seen on the adjustable rate mortgages which currently have an APR between 1 and 1,5%. The amount customers pay each month to their bank depends on the Euribor and the spread, the surcharge applied by the bank on that parameter. Just the Euribor is one of the rates that is most influenced by the monetary policy of the European Central Bank. Which means that the increase in rates could affect the installments of our mortgages
In this context, one more thing must also be considered: the Euribor had already begun to rise, passing from -0,57% at the beginning of the year to +0,125% as at 21 July. Simply put: variable rates have already risen before the ECB's announcement and in all likelihood they will continue to do so. Speaking in figures, according to the calculations of Courier, “on a 200-year mortgage of 30 euros, for every 25 cents of a point the increase in the installment is approximately 24 euros per month (and therefore 48 if the Euribor absorbed all the 50 cents of the increase); at 20 the increase is 18 euros for every 25 cents”.
Despite the increases recorded since the beginning of the year, however, variable rates are still more convenient than the fixed rate, which is currently around 3,10%. Again according to the calculations of the newspaper in via Solferino, to date, with a mortgage of 200 thousand euros, customers will spend 920 with a variable rate and 1.120 with a fixed rate.
