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Mortgages, subrogations fall and the requested amount goes up

Mutui, calano le surroghe e sale l’importo richiesto

Mortgages, year that goes, year that comes. 2018 ended with significant hints on the real estate loan market. The same can now give support to those who are preparing to take out a new loan or, as any borrower should always do, assess whether there are conditions to subrogate (thus acting on duration and rate) the old contract. According to the latest update of the “Barometer of credit to households in Italy” - which is based on the Crif credit information system that collects data relating to over 85 million credit positions - 2018 has highlighted two trends: the first concerns a decline in requests (adding new mortgages and subrogations) of 0.6%. The decline in December contributed to the annual decline, interrupting a positive cycle of six consecutive months of growth. Given the proportions, however, it is more a market settling than a slowdown. Settlement to which the resizing of the subrogations contributed. The decline in subrogations probably derives from the fact that most of those who had the advantage in carrying out the "mortgage exchange" have already done so in the past years.

The second idea that comes from 2018 is the constant recovery of the average amount of mortgage applications. In December it rose on an annual basis to 130,154 euros, 2% more than in the same period of 2017. As for the distribution of requests by duration class, in 2018 the preferences of Italian families see a shift towards the class between 26 and 30, which accounts for 24.9% of the total due to the larger increase (+ 2.2%). Next, the 16 to 20 age group, with 24.6%.

The good news (and here we go to 2019) is that this stability should also concern the rates for the year just begun. Today, in fact, it is possible to take out a new variable rate mortgage by paying under the best conditions (ie those in which a loan of less than 50% of the value of the property is requested) a Taeg (Annual Effective Rate, which includes interest and any accessory costs) of 0.7%. The best respective fixed rate fluctuates around 1.5%. There are no particular reasons - considering the market variables - to hypothesize that rates could rise in a worrying way during 2019. As for the variable, in fact, the Euribor indexes (used by most banks to calculate the variation of the installments month after month) have been below zero for four years and there is no reason today to hypothesize their rise in the current year. At the moment in fact the forecasts on the next ECB interest rate hike - the trigger that also drives the Euribor - indicate that the next tightening, moreover of just 10 basis points, should take place around the first quarter of 2020. A lot will depend on the next economic data , especially those of euro area inflation. If the expectations were to beat by surprise and position themselves above 2%, the ECB could anticipate tightening times.


Andrea Di Munno

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