Mortgages, monthly instalment 159 euro lower than a year ago

And that's eight. With yesterday's 25 basis point cut in the cost of money by the European Central Bank, the balance of the expansionary policy - which started in June 2024 - sees an overall reduction of 200 basis points, with the deposit rate slipping from 4% to 2%.

This is very good news for variable-rate borrowers, who have seen their repayment burdens shrink over time. It is also good news for the market, since since last May new variable-rate mortgages have again become cheaper at the start than their fixed-rate counterparts. As it should be in normal times. The trend could also continue because futures on Euribor rates - the interbank indices that closely follow the ECB deposit rate and to which variable rates are pegged - predict a further cut in rates between now and the end of the year. Even if on this front, as ECB Governor Christine Lagarde reminded us yesterday in a press conference, we are navigating by sight. The uncertainty linked to the tariffs factor is currently too high to unbalance future moves.

According to calculations by the MutuiOnline.it Observatory, following the latest cut, the cost of 20- and 30-year variable-rate mortgages is set to fall in the coming weeks, from 2.83% in May to 2.58%. This is a drop of almost 90 basis points compared to January, when the Tan (Annual Nominal Rate) averaged 3.71%, and more than 2 percentage points compared to May 2024, when the rate stood at 4.77%. Considering a EUR 140,000 mortgage of 20 years' duration, thanks to the cut decided yesterday the instalment will be up to EUR 18 per month lighter, with the monthly payment dropping from EUR 765 to EUR 747, for a saving over the entire duration of the mortgage of over EUR 4,100. Compared to January 2025 - when the instalment was €827 - the saving rises to €80 per month and over €19,000 on the total interest of the loan, while comparing with the situation 12 months ago - when the monthly instalment was a good €159 higher (equal to €906) - the cost over the entire duration of the mortgage will be cut by over €38,000.

As far as fixed-rate loans are concerned, the ECB's decision has no immediate impact. Fixed-rate mortgages closely follow the Eurirs indices, which are an expression of the cost of money at the long end of the curve, influenced by the outlook for economic growth and inflation more than by the manoeuvres of the Frankfurt institution.

On this front, it should be noted that the tensions over tariffs have caused the Eurirs to rise since last spring, and today they stand at 2.73% for the 20-year maturity and 2.65% for the 30-year maturity, values that have remained more or less stable since the rise at the beginning of March, which led to an increase in the indices of around 40 basis points in the space of a few days.