Italian mortgage rates hit two‑year high as ECB deposit rate rises

The European Central Bank’s recent “mini” tightening, including a 0.25‑percentage‑point increase to a 2.25% deposit rate – the highest level since April 2025 – has pushed Italy’s average annual percentage rate (TAEG) on new home‑loan mortgages to 3.959% in May. This is the strongest level since August 2024, when it stood at 4.0962%.

Bank of Italy data also show that interest paid on household deposit accounts remains very low, at 0.1733%, down from 0.366% a year earlier. Analysts say the rise in mortgage rates reflects banks’ expectations of future ECB policy moves, while market observers note that a temporary de‑escalation in US‑Iran tensions and falling oil prices have eased inflation pressures, potentially moderating further rate hikes.

Consumer‑group criticism has intensified over the speed of banks’ loan‑rate increases and the relative caution applied to deposit‑rate adjustments.