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The ECB raises rates by a quarter of a point, bringing the deposit rate from 2 to 2.25%. The decision, widely expected by economists after the energy shock caused by the war on Iran, represents the first monetary tightening since September 2023. The rate on main refinancing rises from 2.15% to 2.40%; that on marginal loans from 2.40% to 2.65%.
Mortgages, more expensive installments: Fabi’s calculations
With the rate hike decided by the European Central Bank, the cost of mortgages could return to above 4%, returning to levels that significantly impact family budgets. If in 2025 the average rate applied to loans for the purchase of homes was just over 3%, today the comparison with a rate that could rise up to 4.25% highlights a significant increase in monthly installments. This was revealed by Fabi after the rate increase carried out by the ECB.
The increase is already evident on mortgages of smaller amounts. For a 50,000 euro loan, the increased monthly expense varies between 29 euros over a duration of 10 years and 35 euros over thirty years. For a 100,000 euro mortgage the increase in the installment goes from 59 to 70 euros per month, while for a 150,000 euro loan the growth is between 88 and 106 euros per month.
The impact increases as the amount requested increases. On a 200,000 euro mortgage the increase in the installment is between 118 and 141 euros per month, while for a 250,000 euro loan the increase is up to 176 euros more each month, equal to over 2,100 euros over the course of a year. The duration of the repayment further amplifies the effects of the rise in rates: the longer the repayment plan, Fabi notes, the greater the weight of the interest on the overall cost of the loan.
In a context in which the cost of living continues to remain high and the purchasing power of families remains under pressure, the increase in the cost of credit represents a further burden that affects spending capacity, savings and the planning of future economic choices.
According to the analysis by Facile.it, however, the installment of a standard variable mortgage could grow immediately, reaching 606 euros and reaching an increase of approximately 50 euros in the installment by the end of 2026.
Lagarde: «Inflation above target until mid-2027»
The risks for the growth and inflation scenario are greater “the longer the war in the Middle East lasts”. ECB President Christine Lagarde said so.
According to the ECB, Lagarde said, «the increase in energy prices will push inflation further during the summer and keep it well above the target in the first half of 2027. It will also have an impact on food, goods and services inflation. Inflation should then return in line with the target in the second half of 2027, supported by the decline in energy prices and a slowdown in increases in other prices”.
However, «the war in the Middle East remains a source of significant uncertainty. The longer energy prices remain high, the greater the risk that they will fuel broader inflation through indirect and second-order effects. We will therefore closely monitor the extent and persistence of the increase in energy prices and how it affects the formation of prices and wages, inflation expectations and overall economic dynamics”, concluded the President.