Mortgage rates more than doubled in a year: in 2 years even 5,000 euros more for a variable rate mortgage


By John

Home mortgage rates have more than doubled in a year, with the increase in the cost of loans which has translated into a real blow for families and in particular for those who have taken out variable rate loans. With charges which, based on calculations by consumer associations, exceed 2,000 euros per year and in some cases even go beyond 5,000 euros. Looking at what has happened in the last year, in particular since the ECB began the process of raising rates (the first tightening after 11 years occurred in July last year), the latest Abi report notes that in August 2023 the average rate on new operations for the purchase of homes rose to 4.29%, or more than double compared to the 2.07% from a year earlier and almost 3 basis points more than August 2021.

A survey by Codacons, which examines the best products on the market today, calculated the variation in the cost of loans for different types of mortgages. In particular, for a 30-year variable rate mortgage of 150,000 euros in September 2021 you paid a monthly installment of 442 euros, today you pay 755, with an increase of 3,756 euros per year. For a mortgage of 100,000 euros over 25 years, it went from 346 to 549 euros per month (+2,436 euros per year), while for those who took out a variable rate loan of 200,000 euros over 20 years, it went from an installment of 858 euros in September 2021 at 1,311 euros for an annual increase of 5,436 euros. According to the consumer association survey, the best APR to date for a 150,000 euro loan over 30 years it is 4.72%, for a 100,000 euro loan over 25 years it is 4.72% while for a 200,000 euro loan over 20 years it is 5.09%. However, Codacons warns that «the latest rate increase ordered by the ECB last Thursday has yet to be fully passed on to the mortgage market, so in the next few days we will see a new upward adjustment in interest rates for variable rate mortgages» .