In recent months, i interest rates on mortgages and on loans to families and businesses have shown a significant reductioninfluenced by the decisions of the European Central Bank (ECB). This trend could represent an opportunity for those who wish to obtain financing on more favorable terms.
However, the economic context, characterized by a slowdown in growth, presents challenges that could affect access to credit.
But what are the most relevant data and how are they reflected on the market?
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The effect of the ECB cuts on the main reference rates
The ECB’s rate adjustment policies are producing clear effects on the main financial indicators used for mortgages and financing. The rate 3 month Euriborfundamental for variable rate mortgages, recorded an average of 2.88% in the first days of December 2024, down 13 basis points compared to November and by as many as 112 basis points compared to the high of October 2023.
This trend offers an opportunity for those who have taken out variable mortgages, who could benefit from lighter monthly installments.
At the same time, the rate 10 year IRSused as a reference for fixed rate mortgages, stood at 2.15%, a decrease compared to previous months. This reduction makes fixed rate mortgages more competitive, encouraging those looking for long-term stability. These declines represent a positive sign, but also reflect the ECB’s need to support an economy that is showing signs of slowing.
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Mortgage rates: an opportunity for families and businesses
The average rates applied to home loans confirm the downward trend, offering potentially more advantageous conditions both for those wishing to purchase a home and for those wishing to renegotiate their mortgage. In November 2024, the average rate on new mortgages it stood at 3.23%slightly decreasing compared to the previous month and significantly decreasing compared to the 4.42% recorded in December 2023.
Business financing also follows this trend. The average rate applied to new business loans fell to 4.47%, a significant decrease from 5.45% a year earlier. This reduction may represent an incentive for companies to invest, but the economic slowdown and uncertainty about the future limit the actual ability to exploit these favorable conditions.
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The slowdown in credit: a sign of economic slowdown
Despite the decline in rates, credit to families and businesses is slowing. In November 2024, loans disbursed decreased by 1.6% compared to the same period of the previous year, with a sharper contraction for businesses (-3.1%) than for families (-0.2%).
This trend is closely linked to the slowdown in economic growth, which induces companies to postpone new investments and families to be more prudent in spending decisions.
Banks, for their part, are trying to contain risks by applying more stringent selection criteria when disbursing loans. This precarious balance between credit availability and demand reflects the complexity of the current economic context, where even low rates fail to stimulate a significant recovery in demand for financing.
