Good news is coming for those who are in talks or intend to shortly take out a mortgage. The ECB Governor Mario Draghi, after announcing a possible suspension, has in fact confirmed that Quantitative Easing will last even longer; indeed, to be precise ” for as long as I need to “. According to estimates, the economy is therefore unable to withstand the suspension of QE and a consequent rise in rates.
What is quantitative easing and how does it work?
Quantitative Easing is an economic intervention, introduced five years ago, decidedly out of the norm, defined by some as a real “medicine for serious diseases”: it is essentially an expansive monetary policy measure, which aims to stimulate economic growth , production and employment. States in difficulty can breathe a sigh of relief and continue to support their public debt.
Technically, QE is the purchase of short-term government bonds by the ECB, which can thus introduce new liquidity into the economic system of the union. In this way, the rates are reduced and it is preferable to invest the money rather than keep it in the bank. Securities purchased by the ECB increase in price and reduce returns. The reduction in rates, on the other hand, is favoring the expansion of mortgages. In fact, once again the growth of residential mortgages was recorded (+ 18.5% the quarterly figure, 48 million granted)
What mortgage to choose today?
The news of the reconfirmation of Quantitative Easing secures the mortgages that must be stipulated and probably all those who would like to stipulate it by the end of next year. A possible suspension of the QE would inevitably lead to a rise in the rates that would make the new mortgages less convenient than the current ones. The danger has escaped immediately, but we do not know, at the moment, what could happen in the future. In the last year, fixed rate disbursements have been confirmed as still high, given the serenity in knowing the interest rate a priori and the savings guaranteed by the stable and very low values of the Eurirs index.
In choosing the mortgage we must not forget to relegate the right importance to all the components that can increase the costs, so watch out for the Taeg, and the variable spread. In the event of a future increase in the floating rate interest, the conditions of the mixed rate can be taken into account, which allow the transition to the fixed rate under certain conditions.