The year 2011 is marking the return of the arrogance of fixed-rate mortgages. In January, in fact, seven out of 10 loans have been signed with the rules of the rate locked for the entire amortization period. This is a significant overhang from the average of the mortgage loans in the second half of 2010, when the fixed rate occupied 32.7% of the total pie of mortgages granted. But now we are at 68.8%. In free fall, disbursements pure variable rate (slipped from 40.9% to 17.4%) and even those with variable rate cap (from 24% to 12.8%, data MutuiOnline.it ).
Extended until July 31 the possibility of suspending the rate is maintained absolutely
residual share of mixed-rate mortgages (which let you change or a rate several times during the remaining life of the contract), which fell from 2.4% to ' 1 percent.
How to read this revival of the fixed rate? From the macroeconomic perspective, the most evident signal is given by the prospect of higher interest rates. Thursday, February 3 the European Central Bank decided to leave the rate unchanged at 1% of the European reference (stuck on this level since May 2009) but the team led by Governor Jean-Claude Trichet has hinted that if the ' inflation continues to rise (at the end of 2010 exceeded the alert level of 2%) is prepared to intervene by raising the cost of money (the expectations are for a mini-close to 25 basis points in the second half of the year).
The point, hand calculator, is whether this bullish scenario justifies the financial choice to opt for fixed rate now (more expensive) than the variable. Comparing the best deals in 20 years, it follows that the gap between the two products is greater than 200 basis points. In detail, the best variable is obtained in exchange for an APR (annual percentage rate, including interest and other expenses) of 2.21 percent. ll fee best fixed costs to 4.75 percent. Translating the proportion in rate and assuming a loan of € 100 thousand, the monthly amount to be paid now stands at € 510 (variable rate) or 641 (fixed rate).
Because, over time, the rate equals the variable-rate it is necessary that the European Central Bank will bear interest rates from 1% to 3.5%. That increases the current rates of 250 basis points. A perspective that, at present, seems far away.
offer moves the market?
the revival of the fixed rate contributes (in addition to the fear of higher interest rates) the attitude of lenders (the offer) that at this moment is far from application. You can tell just by checking the cake of requests for loans. Also from surveys MutuiOnline.it in January, shows that 62.1% of the requests is a variable rate (40.4% pure variable rate, with 21.7% cap) and the 35.3% rate fixed. So the question is still predominantly floating rate. However, as we have seen, disbursements are mostly at fixed rates. It is therefore clear that there is a shift in demand from supply. In practice, the data indicate that at this stage (when Eurirs have reported more than 3.5%, after touching a record low 2.7% in August 2010) the banks prefer to lend fixed-rate mortgage. Perhaps, to avoid the risk of customers, after choosing the variable rate, decides to run away after a short time (through the opportunities guaranteed by subrogation ) from Frankfurt soon begin to raise rates.
From:
http://www.ilsole24ore.com/art/finanza-e-mercati/2011-02-13/mutui-clienti-chiedono-variabile-151002.shtml?uuid=AahZwz7C
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