Mortgages, falling installments: how much they could fall in 2024

For an average loan, it would be around 10 euros, reaching almost 100 euros by the end of the year and 120 euros by June 2025

Mortgage payments declining in 2024? And how much could they go down? The ECB is meeting today and no changes are expected on the interest rate front, which should remain stable. But the installments of Italian variable mortgages could already start to decrease from the second quarter of 2024 with a drop which, for an average loan, would be around 10 euros, reaching almost 100 euros by the end of the year and 120 euros by June 2025 This is what emerges from an analysis by which examined Euribor futures, which represent market expectations.

“Christine Lagarde – explain the experts at – ​​declared that the first ECB rate cuts could arrive in the summer, but as is known, the Euribor, the reference index for variable rates, often tends to anticipate the decisions of the Central Bank, therefore it cannot be ruled out that the first benefits on borrowers’ installments could arrive as early as the second quarter of this year”.

Here’s how much the installments could go down

Analyzing the installment of a recently signed average variable mortgage (126,000 euros in 25 years, 70% LTV stipulated in January 2022), we see how this has reached over 750 euros in December 2023, but according to futures forecasts (updated to 19/01/2024) could drop to almost 740 euros starting from the second quarter of 2024, drop by another 30 euros in the third quarter, and then close the year at around 660 euros, i.e. almost 100 euros less than in the December 2023 installment. By extending the time horizon, in June 2025 the installment could reach around 630 euros (-119 euros).

The increase in interest rates that characterized much of last year affected the main economic values ​​linked to mortgages, starting from the average request which, according to the joint – ​​ Observatory, was equal to to 127,595 euros (-8% less than 2022). Although we were faced with a drop in the amounts requested, the increase in interest rates still increased the average installment for new mortgages by 13%; the coupon went from 612 euros in 2022 to 695 euros. However, the average duration of the repayment plan is stable (close to 25 years) and the value of the property being mortgaged (just under 200,000 euros). The Loan To Value, i.e. the ratio between the value of the property and the mortgage requested, is decreasing, going from 76% in 2022 to 71% in 2023.

The average age of applicants is increasing – and this is not good news; if in 2022 those who applied for a mortgage were on average less than 38 years old, in 2023 they were back above 40 years old, which had not happened since the first half of 2021. The change is linked to the collapse in the percentage weight of under 36s, past from 50% in 2022 to 39% in 2023; the increase in interest rates has evidently weighed more heavily on the segments of the population with less solid income and, even by isolating only the mortgages requested for the purchase of the first home, a significant drop in the share of under 36s emerges which drops to 51%, compared to 58% in 2022.

2023 saw a return of subrogation, driven above all by the desire of those who had a variable mortgage to protect themselves from the increase in installments; according to the analysis by, the weight of subrogations has reached 21% of total requests, compared to a very low 7% recorded in 2022. Lastly, it is not surprising to see how on the interest rate front, more than 9 aspiring borrowers out of 10 opted for the fixed one which, for 2023, almost always offered better conditions than the variable one; the latter, in 2022, collected more than 35% of the request.