According to a survey from 2020, one in five Italian households were repaying a mortgage and one in two house purchases were backed by a mortgage loan. Mortgage loans granted in Italy increased more than twofold since 2013, reaching a total value of 36 billion euros in 2020. That year, the average mortgage loan for house purchase amounted to 131.5 thousand euros and had an average duration of 23.5 years. Figures, however, vary significantly across regions. The majority of mortgage loans were registered in the north-west of the country, which accounted for nearly 40 percent of the total loans value. On the other hand, the average mortgage loan was highest in the center of the country. Similarly, duration, average installment, and interest rates also differed according to the region.
Mortgage loans are generally divided into two main categories according to their interest rates. Interest rates are subject to fluctuations and are influenced, among others, by Central Banks' monetary policy, as well as supply and demand. There are mortgages with a fixed interest rate, more secure and indicated for borrowers who fear and can not afford the fluctuations in the market rates. A fixed interest rate, however, is generally higher. There are also mortgages with variable interest rates. For these, interest rates fluctuate over time depending on an underlying benchmark defined by the lender. In recent years, new types of mortgage loans appeared - hybrid-rate mortgages - and interest rates can switch from fixed to variable at pre-defined conditions. In general, mortgage loans can be renegotiated depending on the borrower's financial situation.
