Rate of less dear variable mortgages, better rates for funding and loans. It is a lower cost to refinance the public debt, always if the tresury surge will not continue, dragging European government bonds to the rise.
The ECB decision to cut the cost of the money of 25 basis points, bringing the reference rate to 2.25%, has a series of effects on citizens, businesses and governments.
Rate of lighter mortgages. Facile.it and Mutui.it have estimated that with the new rates cut the installment of a standard variable mortgage should decrease by about 17 euros, going from the current 640 euros to 623 euros. The cut may not be the last of 2025 and by the end of the year the installment could drop to 598 euros, with a saving of about 42 euros compared to today.
As for the fixed rate, however, according to a Fabi study, it could soon arrive around 2.55%, much more contained than the 4% practiced until about a year ago. More in detail, on a mortgage from 100,000 euros to 20 years, the installment will be reduced by 76 euros per month, while for the same amount at 30 years the savings will be 81 euros. For a financing of 250,000 euros to 30 years, the monthly reduction reaches 203 euros, equal to over 2,400 euros per year. The effect will be more marked on long -lasting mortgages, where the weight of interest is greater.
Breath for investments. With the cost of the lowest money, the ascent of loans to families could continue but also to businesses. According to ECB data, the average interest rate on new loans to companies dropped to 4.1% in February, from 4.3% of January. And the growth of loans to business has returned to increase in February, reaching 2.2%. But it is not all downhill, and always because of uncertainty: credit standards for businesses have again stiffened slightly in the first quarter of 2025. As in the previous quarter, this is mainly due to the fact that banks are increasingly worried about the economic risks faced by their customers. The demand for loans from companies has decreased slightly in the first quarter, after a modest recovery in the previous quarters.
The cost of the debt drops. The start of the ECB cuts last June had dropped the ten-year BTP from a peak of 5% to the end of 2023, to a minimum of about 3.20% in December 2024. The Budget Parliament Office, in December, had estimated cumulative savings in the period 2025-29 for 17 billion in expenditure for interest expense. But the latest turbulence on the markets, with the rise in the Treasury yields, also weighed on the BTPs whose yield has slightly climbed to 3.65%.