29 May 2008
Italy’s property market will be encouraged by the news that the Italian government has struck an agreement with banks to revert mortgage payments to lower levels last recorded in 2006, while banks have also agreed to switch variable-rate mortgages into fixed-rate ones.
Speaking at a news conference, Prime Minister Silvio Berlusconi, commented: “We will introduce the possibility (for homeowners) to go back to the mortgage rates of 2006 with a lengthening of the time for which the mortgage will be paid.”
The banks cooperation will bring “relief to the millions of families who have found themselves in the trap of having a variable-rate mortgage,” says Economy Minister Giulio Tremonti.
Tremonti said that after converting the mortgage from variable to fixed-rate, if average interest rates have risen at the end of the initially agreed mortgage, this duration will be extended. While, if rates have fallen banks will reimburse the homeowner.
However, final details still have to be ironed out and it is not yet sure when the deal will come into effect.
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