Mortgage rates down, what Coronavirus has to do with it

The Coronavirus lowers mortgage installments, it’s all true. But what does money have to do with the health emergency? Well, the epidemic alarm has also negatively affected the markets (not only Chinese but all over the world). The economy is therefore wobbling and, from China, financial uncertainties are spreading all over the globe, bringing down the Eurirs indices, on which the calculation of the fixed rate mortgage installments (both new and subrogations) depends.

Coronavirus, the markets are shaking and the economy is shaking

Coronavirus, as mentioned above, marked a strong setback to markets (national and international). Widespread alarmism has translated into instability, which had gods negative effects immediately on the economy Chinese. To date, that the Chinese market represents a large part of the world market, it is easy to understand why the difficulties of this continent manage to scare the rest of the world.

With entire isolated countries, as well as restricted travel and travel, the risk of collapsing imports and exports Chinese and, if so, all the countries whose economy relies heavily on trade with China would be forced to deal with not a few difficulties.

Mortgage rates down: what Coronavirus and Eurirs indices have to do

All these financial uncertainties, according to the latest analyzes of Grafinomix, have contributed to bring down also the Eurirs indices, which since the beginning of the year, and with a downward acceleration starting from mid-January, have registered a sharp drop of 20-30 basis points.

The Eurirs indices allow, in the medium to long term, to discount the movements in European interest rates (ie the cost of money in Europe). From these estimates, and from their performance, the interest calculated on mortgages also depends. In fact, a downward trend in the Eurirs indices leads to one interest reduction and, therefore, also a decrease in the amount of the mortgage installments.

This means in practice that anyone who is in the process of drawing up a mortgage or is paying one but is considering the subrogation (i.e. moving to another institution), will be able to enjoy better conditions regarding the calculation of the amount of the installments to be paid, with deviations of up to 30 basis points from those who had access to financing at the end of 2019.

If you are thinking of open a mortgage, or if you want to change banks in search of better conditions, maybe this is the right time to do it.