Mortgage rates drop in April, down to 4.09%


By John

The cost of mortgages falls further, returning to the levels of more than a year ago and significant savings of the order of several hundred euros are expected for Italian families. The good news arrived this morning from the Bank of Italy which decreed a neggs drop in the cost of money for families, while consumer associations immediately took into account the benefits that this could entail for the pockets of savers who are buying a house. According to the 'Banks and money' series by Via Nazionale, the interest rates on loans disbursed in April to families for the purchase of homes including ancillary expenses (Global Effective Annual Rate, Taeg) fell to 4.09% from 4. March 21st.

«We return to the levels of February 2023 when the APR was at 4.12» he comments Massimiliano Dona, president of the National Consumers Union. In practice, according to UNC calculations, considering the amount and average duration of a mortgage, the drop in rates means that the installment, for those who have now taken out a variable rate mortgage, «drops, compared to the peak of November 2023, by 61 euros per month, equal to an annual saving of 732 euros”. The savings calculated by Codacons are also always consistent: assuming a loan of 125 thousand euros over 25 years, we are talking about around 58 euros on the monthly instalment, equal to 696 euros less per year. According to the Bank of Italy's findings, the APR on new consumer credit disbursements stood at 10.59% (10.61 in the previous month). While some upward adjustments were noted for interest rates on new loans to non-financial companies, which rose to 5.30% from 5.26 in the previous month.

The interest rates on all outstanding deposits remained unchanged at 1.04%. On the credit front however, again in the month of April the loans granted were still decreasing for families and businesses but the contraction is gradually reducing: those to the private sector decreased by 2.2% over the twelve months (-2.4 in the previous month). And, specifically, loans to families decreased by 1.2% in one year (-1.4 in the previous month), while those to non-financial companies fell by 3.4% (-3.9 in previous month). Finally, as regards private sector deposits, they recorded a decrease of 1.6%, compared to a zero twelve-month change rate in March, while bond funding increased by 21.6% from the previous 18.7%.