{"id":11527,"date":"2020-01-02T16:18:42","date_gmt":"2020-01-02T16:18:42","guid":{"rendered":"http:\/\/www.alessandropasqual.it\/home-loans-2020-what-should-we-expect-from-2020\/"},"modified":"2025-08-27T14:43:00","modified_gmt":"2025-08-27T14:43:00","slug":"home-loans-2020-what-should-we-expect-from-2020","status":"publish","type":"post","link":"https:\/\/www.alessandropasqual.it\/en\/home-loans-2020-what-should-we-expect-from-2020\/","title":{"rendered":"Home loans 2020, what should we expect from 2020?"},"content":{"rendered":"\n<div class=\"wp-block-ht-block-toc is-style-outline htoc htoc--position-wide toc-list-style-plain\" data-htoc-state=\"expanded\"><span class=\"htoc__title\"><span class=\"ht_toc_title\">Table of Contents<\/span><span class=\"htoc__toggle\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"16\"><g fill=\"#444\"><path d=\"M15 7H1c-.6 0-1 .4-1 1s.4 1 1 1h14c.6 0 1-.4 1-1s-.4-1-1-1z\"><\/path><path d=\"M15 1H1c-.6 0-1 .4-1 1s.4 1 1 1h14c.6 0 1-.4 1-1s-.4-1-1-1zM15 13H1c-.6 0-1 .4-1 1s.4 1 1 1h14c.6 0 1-.4 1-1s-.4-1-1-1z\"><\/path><\/g><\/svg><\/span><\/span><div class=\"htoc__itemswrap\"><ul class=\"ht_toc_list\"><li class=\"\"><a href=\"#htoc-tassi-bce-fermi-per-tutto-il-2020\">ECB rates firm throughout 2020<\/a><\/li><li class=\"\"><a href=\"#htoc-e-l-euribor\">What about Euribor?<\/a><\/li><li class=\"\"><a href=\"#htoc-conviene-indebitarsi-a-tasso-variabile-o-fisso\">Is it better to take on variable-rate or fixed-rate debt?<\/a><\/li><\/ul><\/div><\/div>\n\n<p>Christine Lagarde's first meeting at the helm of the <strong>European Central Bank<\/strong>closed as expected: <strong>no tweaking of<\/strong> <strong>key<\/strong> <strong>interest rates<\/strong> and substantial continuity with the leadership of former Mario Draghi. So, the main refinancing rate remained at 0.00%, while the rate on the marginal lending facility was confirmed at 0.25%, and the rate on deposits with the institution at - 0.50%. <\/p>\n\n<p>For the future, Lagarde merely reiterated the <em>policy<\/em> already formulated by her predecessor, pointing out that rates will remain at \"current levels or lower\" until inflation points toward the 2 percent target. But what will be the implications of what in the mortgage sector? <\/p>\n\n<!--more-->\n\n<h2 class=\"wp-block-heading\" id=\"htoc-tassi-bce-fermi-per-tutto-il-2020\"><strong>ECB rates firm throughout 2020<\/strong><\/h2>\n\n<p>Let us begin by sharing some thoughts on ECB rates. Lagarde reiterated that <strong>quantitative easing<\/strong> (the monetary workout program deliberated by the previous administration, with purchases of government bonds at 20 billion euros per month) will last as long as necessary and will end only when the ECB chooses to raise benchmark rates. <\/p>\n\n<p>Thus, a clear indication: <strong>ECB rates will rise only when QE<\/strong> <strong>comes<\/strong> <strong>to<\/strong> an <strong>end<\/strong>. Given that the end of the program is not even on the horizon, we can only imagine that throughout 2020 rates will remain at these levels, or lower thresholds. <\/p>\n\n<h2 class=\"wp-block-heading\" id=\"htoc-e-l-euribor\"><strong>What about Euribor?<\/strong><\/h2>\n\n<p>Considering, however, that most variable-rate mortgages today are indexed to Euribor, and not to the ECB rate, it is also worthwhile to make a brief reflection on what the short-term developments of this parameter might be.<\/p>\n\n<p>Well, the <strong>futures rates<\/strong> linked to <strong>projections on the evolution of Euribor<\/strong> for the next few years say that the index will fall again between now and June 2021, from the current - 0.40 to - 0.55 percent. In short, even on the Euribor front, everything suggests that 2020 will be a year of very low rates for the very short term and for the medium term (the parameters are expected to remain in negative territory for at least the next 3 years). <\/p>\n\n<h2 class=\"wp-block-heading\" id=\"htoc-conviene-indebitarsi-a-tasso-variabile-o-fisso\"><strong>Is it better to take on variable-rate or fixed-rate debt?<\/strong><\/h2>\n\n<p>One clear indication emerges from the above: <strong>rates will remain low throughout 2020<\/strong> and, most likely, for the next few years as well. Those with <strong>variable-rate mortgages<\/strong> can therefore sleep soundly, assessed that there will certainly be no surprises for the years to come: of course, the reliability of the forecasts decreases as the time horizon is shifted and, therefore, things could drastically change if 10- or 20-year forecasts are taken into account. <\/p>\n\n<p>On the other hand, as far as <strong>fixed-rate mortgages<\/strong> are concerned, it is already evident that the Eurirs indices-the parameters used to be able to calculate finished rates-have been on the rise since the end of August, when they had hit an all-time low. So, it is likely that 2020 may represent a year of slight but steady increase in this parameter, consequently making it somewhat less convenient to take on fixed-rate debt, especially for shorter time horizons. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Christine Lagarde's first meeting at the helm of the European Central Bankclosed as expected: no tweaking of key interest rates and substantial continuity with the leadership of former Mario Draghi. So, the main refinancing rate remained at 0.00%, while the rate on the marginal lending facility was confirmed at 0.25%, and the rate on deposits [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7890,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[262],"tags":[387,386,370],"class_list":["post-11527","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying","tag-euribor-en","tag-home-loans","tag-home-mortgage-rates"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/posts\/11527","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/comments?post=11527"}],"version-history":[{"count":1,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/posts\/11527\/revisions"}],"predecessor-version":[{"id":11529,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/posts\/11527\/revisions\/11529"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/media\/7890"}],"wp:attachment":[{"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/media?parent=11527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/categories?post=11527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.alessandropasqual.it\/en\/wp-json\/wp\/v2\/tags?post=11527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}