2018 home loans: the best moment to buy
The year 2017 has closed with a positive result for the mortgage market. A certain increase has been recorded in the average sums requested but also in the sums granted. Fixed-rate mortgages were the most popular. People asking for a mortgage have chosen the security of a constant rate and have reduced their monthly instalments thanks to long amortisation schedules.
The average sum requested has overcome € 128,000, i.e. the highest value recorded during the last three years. The loan-to-value – i.e. the percentage of the property value to be financed – varied between 55% and 80% of the overall value of the house. Banks granted money destined to purchase properties mainly for sums ranging from € 50,000 to 100,000 (36.3% of the sample examined) and from € 100,000 to 150,000 (33.2%).
Almost one third of applications for funding must be refunded in 20 years, even if 24.6% of people asked for longer amortisation schedules - between 30 and 40 years - that banks have only granted in 18.1% of cases.
Most of the applications for a mortgage came from Northern Italy and were made by people between 36 and 45 with fixed-term employment contracts and an average annual income between € 10,000 and € 20,000.
For the year 2018 few novelties are expected with respect to the past. This will be a year of respite for those who have subscribed an adjustable-rate mortgage. This respite will be guaranteed by the intervention of the European Central Bank, which - at least until September - will continue to inject liquidity into the markets, thus containing Euribor, that is responsible for establishing the interest to be paid.
On the contrary, to those who will buy a house this year and will have to choose a new mortgage, the year 2018 is offering interesting conditions in terms of underlying rates, not only because Euribor is expected to keep negative values, but also in terms of house prices. In fact, real estate market quotations are so low that they have become a real phenomenon in the European reality.
The choice of the type of mortgage – fixed-rate or adjustable-rate – will depend more on offers (and strategies) than on banks: just as in 2017, when people preferred fixed-rate mortgages.