Italy’s Mortgage Shift: Why 30-Year Loans Are Now the New Standard

Shift Toward Thirty-Year Mortgages

Data from the Banca d’Italia survey of 236 banking institutions shows that contracts with repayment terms of thirty years or more reached 49.5% of all new mortgage originations, jumping from 43.3% during the previous period. This expansion pushes the average duration of new home purchase loans to just under twenty-five years, reflecting a broader structural transformation in the Italian credit market.

Parallel data from the CRIF credit barometer for the first half of the year indicates that average requested loan amounts stood at 153,972 euros, marking a slight 0.2% decrease year-over-year while total credit demand fell by 5.9%. Meanwhile, the Bussola Mutui CRIF and MutuiSupermarket report places the average disbursed loan amount at approximately 139,000 euros, with 48% of those grants exceeding twenty-five years in duration.

Property Prices and Borrowing Capacity

The rise in loan duration directly counters stagnating borrowing amounts against rising residential property valuations. According to Bussola Mutui findings, the average value of homes purchased with a mortgage sits near 180,000 euros, driven by a 5.5% annual increase in average square-meter prices.

To bridge the gap between fixed borrowing capacities and climbing real estate prices, buyers rely on extended amortization schedules to lower monthly payments. According to the Associazione Bancaria Italiana (ABI), average interest rates on new home loans dropped to 3.48%. For a 140,000-euro loan at this rate, a twenty-year term requires a monthly payment of roughly 810 euro and a total repayment of 194,500 euro. Extending that same capital over thirty years reduces the monthly payment to about 627 euro—a 22.6% reduction—though total interest costs climb by 57% to nearly 85,800 euro.

Demographics and Loan-to-Value Trends

Younger demographics drive the demand for thirty-year terms. CRIF reports that borrowers aged 25 to 34 account for 31.4% of credit requests, while those aged 35 to 44 represent another 31.3%. Because most banks enforce a final age limit between 75 and 80 years at the conclusion of the amortization period, these under-45 borrowers are positioned to take on multi-decade commitments. Concurrently, data from Facile.it places the average applicant age at 39 years old with an average requested duration of 23 years and a loan-to-value ratio of 67%.

High loan-to-value lending is also expanding. The Banca d’Italia confirms that the share of originations exceeding 80% of the property value rose from 19.5% to 21.4%. Regional reports, such as analysis from [removed] citing the central bank data, note that banks maintain cautious lending policies by applying stricter spreads to higher-risk borrower profiles while keeping overall capital supplies steady.

Fixed Rates and Market Tools

Faced with long-term financial commitments, borrowers heavily favor fixed-rate structures to hedge against future volatility. Data from MutuiSupermarket shows that fixed-rate requests accounted for 88% of the total in the second quarter, while Facile.it records a 92% preference for fixed products among its users.

Borrowers retain options to adjust their financial terms over time. Surrogacy provisions allow consumers to transfer mortgages to competing institutions without penalty to secure better rates or adjust loan durations, while renegotiation permits terms changes with original lenders. Additionally, the Consap first-home guarantee fund, extended through December 31, 2027, continues to back up to 50% of the capital quota—and up to 80% for qualifying under-36 applicants—though extended loan durations remain the primary mechanism for managing immediate household liquidity.