Italy faces rising mortgage rates and housing stress despite government guarantees

The Bank of Italy reported that interest rates on new home mortgages have risen to 3.96%, the highest level since August 2024, as the European Central Bank’s rate hikes filter through the market. Consumer groups warn that the near‑4% cost of borrowing adds to families’ financial strain amid inflation and higher energy prices.

At the same time, the public insurer Consap said its guarantee fund has enabled 568,000 mortgages, including 370,000 for households led by buyers under 36 years old. Guarantees cover up to 80% of the loan for low‑income young families (ISEE < 40,000 €) and 50% for higher‑income applicants. Officials argue the fund is essential for the government’s “Piano casa” plan to build 100,000 affordable homes over ten years, but experts call for broader measures—such as loan renegotiation tools and stronger income support—to prevent a wider housing‑affordability crisis.