The ECB is expected to cut interest rates for the last time this year. Should Eurotower lower the indices by 25 basis points, the rate of a standardvariable credit will fall by around 18 euros in the coming months, from the current 682 euros to 664 euros. This is estimated in a report by Facile.it.
What happened in 2024
The year 2024, especially the second half of the year, was a period characterized by the decline in indices; From June onwards, the ECB began to cut interest rates, giving families on variable loans some breathing room, but the decline is still marginal considering the increases in recent years. Since the beginning of 2024, the rate of a standard loan has fallen by 66 euros, from 748 euros to 682 euros, still far from the values at the beginning of 2022, when it was only 456 euros. “Given the favorable market conditions, many have taken advantage of the banks’ offers to transfer the loan, switching from variable to fixed and thus reducing the rate,” explain the experts at Facile.it. “But thanks to the ECB’s interest rate cuts, those who kept the variable rate were also able to save, albeit in a less pronounced way.”
Predictions for 2025
What are the forecasts for the development of variable interest rates in 2025? An analysis of the futures on the Euribor (as of December 6, 2024) shows that the indices should continue to fall in the coming year, especially in the first half of the year, before stabilizing.
Calculations and simulations
According to market expectations, the 3-month Euribor should fall below 2% in June; If these forecasts come true, the rate of the standard loan under consideration would fall to 612 euros by the first half of 2025 and reach almost 600 euros by December 2025, with a total decrease of almost 80 euros compared to the current rate.
Variable loan: wait for the decline or transfer?
According to the analysis of Facile.it, which considers the best online offers* for fixed interest rates in loan transfer, the TAN indices for a standard loan start at 2.50%, with a rate of 565 euros (values that even go to 2, 23%, rate 548 euros, in the case of a “green loan”).
The savings
So the data shows that by transferring the standard variable loan today, one would move from a variable rate of 683 euros to a fixed rate of 565 euros, with an economic benefit of almost 120 euros. In short, a higher saving compared to the prospect of interest rate cuts and, above all, a faster one.
Fixed or variable, which is worth it?
Variable rates, although falling, remain less competitive than fixed rates for the time being. According to Facile.it’s simulations, which look at the best online offers for a standard fixed-rate loan, TANs start at 2.49%, with a rate of 564 euros. When it comes to variable interest rates, however, the best offers start with a TAN of 3.68%, with an initial rate of 635 euros. The numbers speak for themselves, the choice seems obvious at the moment.
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