According to the latest ABI (Italian Banking Association) monitoring, there is bad news for those who want to buy a home and request a mortgage. Interest rates have increased againAn upward trend is being recorded which is not likely to stop at the moment.

abi monthly report

As noted in the ABI monthly report updated in November 2023 (available here): “The most recent data concerning trends in the euro area and the Italian economy, show that the effects of the restrictive monetary policy initiated by the ECB in a are manifesting themselves over the course of the year (e.g. strong contraction in the PMI index, annual decline in industrial production), with effects that can also be seen in The banking market in Italy, which he has observed increase in mortgage interest rates Compared to previous months.

Rates have increased in the last one and a half years Highest level of last decadeWhile still high inflation and the actions of the European Central Bank to try to control it are having a clear impact on the real estate market and, in general, the economy and the purchasing power of Italians.

But without going too far back in time, it was actually more convenient to request a mortgage between 2020 and 2021 than it was until a few years ago, when — before the pandemic and the various geopolitical crises that followed — mortgage rates were at historic lows. Were.

What are the interest rates today?

As reported by the ABI, interest rates on financing operations in October 2023, unfolded in November 2023, increased, recording the following increases:

  • Average rate on new transactions for purchase of houses It was 4.37%, in September it was 4.21%;
  • Average rates on new business financing operations It was 5.45%, in September it was 5.35%;
  • average rate on total loan It was 4.70%, in September it was 4.61%.

Moreover, in October 2023, loans to businesses and households declined by 3.6% from a year earlier, while they had declined by 3.8% in September 2023, when loans to businesses declined by 6, 7 % and loans given to households had decreased by 6, 7%. 0.9%. According to the ABI, in fact, “the decline in loan volumes is consistent with a slowdown in economic growth that reduces demand for loans”. so, fewer people are asking for loans,

When will mortgage interest rates drop?

Where will interest rates go in the coming years? Experts predict decline, However, the timing of this decline remains uncertain. Predict mortgage rates for i next five years That’s a tall order, especially considering the unprecedented ups and downs of the past year.

In any case, everyone seems to agree that rates will fall again. it’s just a matter of time.

Many factors influence the tendency of interest rates to rise or fall., which in the broadest sense includes the economic conditions of a country (but also of the main world powers), the monetary actions of the European Central Bank and, last but not least, inflation. It should also be said that long-term mortgage rates are directly influenced by the bond market. Finally, the rate you are offered on a mortgage will also depend on the lender you apply to, their business costs and your financial profile.

there also mortgage application This can affect interest rates overall, leading to higher rates by reducing the amount of capital available to borrow. Conversely, when demand from borrowers is low – as we are seeing now due to low average interest rates – lenders may consider offering more competitive rates or other incentives to attract borrowers.

How to get the best rate

Here are some tips that may help Get the best possible rate For Loan:

  • Keep an eye on mortgage rates, which are constantly changing. This will make it easier to find and lock in the cheapest rate at the best time.
  • Having enough credit already available can make a difference, compared to those that start from zero and have no guarantees, because when requesting a mortgage the credit institution always checks the credit available to the applicant (as well as his income) to determine his solvency. And, as a result, the interest rate to be applied on the loan. In general, the higher your credit score, the better your rate. Trying to put aside credit and being financially stable and reliable before applying is an initial step that anyone who wants to get a profitable loan should consider, if they can.
  • Shop around and compare lenders, Consider and evaluate as many mortgage lender options as possible to find the best deal.

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