What type of housing can you purchase with an average salary in Italy?

As per an examination conducted by Tecnocasa using Istat figures, the mean yearly household income in Italy is €35,995 , corresponding to around €2,999 monthly . Many Italian families wonder: what type of dwelling can they afford with this wage level?

To address this query, specialists performed a simulated calculation of the home loan, factoring in the subsequent parameters:

• Loan duration : 25 years
• Average interest rate : 3.70%
• Maximum mortgage-to-income ratio : 30% (i.e. maximum 900 euros per month)
• Loan to Value (LTV) : 80% (i.e. the bank funds 80% of the property cost, and 20% must be self-financed)

Under these conditions, a household with an average salary can purchase a property valued at 220,000 euros , securing a mortgage with a monthly installment of 900 euros .

How much money is necessary to acquire a property?

Despite the accessibility of mortgages, procuring a residence involves substantial upfront expenses. To buy a property worth 220,000 euros, you will require:

• Initial deposit (20% of the price): 44,000 euros
• Bank charges (application review, property valuation, loan initiation) : 1,500 – 3,000 euros
• Acquisition taxes :
  • If the property is bought from a private seller – 2% of the cadastral value
  • If the purchase is made from a developer (new construction) – 4% VAT from the price
• Notarial services : 2,000 – 4,000 euros
• Real estate agency fee (if utilized): 2-4% of the price (approx. 4,400 – 8,800 EUR )

In general, the total amount for the transaction could range from 50,000 to 60,000 euros (inclusive of the initial payment and all related expenses).

Challenges and potential resolutions

This analysis indicates that despite mortgage availability, purchasing a home demands considerable savings . This poses a significant hurdle, notably for younger purchasers and those lacking savings.

Yet, the market presents several remedies to surmount these challenges:

• Loans with LTV of 90% or 100% , reducing the down payment amount (mainly for individuals up to 36 years old)
• Government incentives for acquiring a primary residence
• Subsidized mortgage schemes provided by select banks

The selection of mortgage type and property should be carefully considered. It is vital to evaluate financial capacity and income security in the long run. Hence, comparing various bank offers and consulting real estate experts is advisable to optimize investments .