MARKET Restructuring, mortgage or loan? Obliged choice up to 30 thousand euros

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Tax deductions continue to support restructuring, and more and more Italians require loans in order to be able to tackle the initial expenditure. An often forced choice, given that banks do not grant mortgages under, at best, 30 thousand euro. Let’s see then what are the opportunities to be exploited, the costs to be faced and the things to pay more attention to.

The fiscal advantage pushes the market
In all of 2018, 50% of the costs of the interventions can be deducted, even 65% in the case of ecobonus. According to Real Estate Scenarios, in 2017, 700 thousand homes were renovated and 23.2% of the acquisitions concerned buildings that were then polished. The same movement is observed looking at credit requests: 34% of loans are allocated to housing. More specifically, 24% for a renovation, 7% for furniture and 3% for the purchase (data ).

The benefits of restructuring
Many Italians therefore invest to improve their homes. Firstly, it is a choice dictated by necessity reasons, given that the overwhelming majority of Italian real estate assets are obsolete (36.6% of homes are over 40 years of age and consume, from an energy point of view, six times more than a class B).

But the goal of improving the profitability of the building is also very important. A renovation or new appliances generally increase the living comfort, the efficiency and therefore the savings in the bill. Putting in the field the most widespread works (change of boiler, fixtures, roof or thermal coat) can be reduced by 20-40% per year the consumption required for the winter heat and for the cool summer (estimate Enea). On the market, a “refurbished” house acquires an added value higher than the costs incurred for the works, especially in the main capitals according to a development of real estate scenarios: + 10.4% in Rome, + 9.8% in Naples, + 9.4% in Florence, + 9% in Milan, + 8.1% in Bologna.

«And if we talk about income-generating houses, a major restructuring can increase the potential rent up to a maximum of 50% in the most dynamic cities, such as in Verona», points out Giuseppe Romano, director of the company’s study center Consultique consultancy and member of the Nafop board (Association of independent financial consultants).

Costs: loans and loans compared
Therefore, the reasons for proceeding are not lacking. But how much is it? And what is the right tool? Today, the average amount of the most common interventions, based on requests for funding from the and portals, is fixed at 15,904 euros. But the development of real estate scenarios estimated a total expenditure of 46.5 billion in 2017, which divided by about 700 thousand interventions returns an amount exceeding 64 thousand euro. We must also take into account that often when buying a house a part of the mortgage is used for the purchase and another for renovations.

Looking at the cost, then the monthly payment to be paid, between loan and mortgage there is no comparison, to the full advantage of the latter. Mortgage financing involves expert expenses and a notary deed, but the final outlay will always be lower thanks to the market rates that allow you to get money at a 2% Taeg, against 7-8% of the loans (the Taeg is the reference value to be considered, ie the “global annual percentage rate”). What’s more, the interest payable on the loan can be deducted to Irpef up to 19% (if we talk about the first house), while this discount is not granted loans. The problem is to find a compromise between the needs of the client and the proposal of the supplying banks. First, mortgages are not granted for low amounts.

The main institutions, such as Intesa Sanpaolo, offer them starting from € 30 thousand , but some direct banks (such as CheBanca or WeBank) propose the mutual restructuring of € 50 thousand. And this mortgage loan does not cover the entire amount of the work, but is generally subjected to some “stakes”, such as a maximum ceiling of 80% of the total interventions, or as a percentage of the total value of the building. Attention then that some clauses now widespread, favorable to the customer, often do not trigger for the mutual restructuring: it is the case for example of the possibility of suspending the installment.

The loan has some procedural advantages , due to the fact that the money, once the preliminary investigation has been carried out, is made available to the customer more quickly, and without the need to burden the property of a mortgage. «Having said this, there is no doubt that when the characteristics of the operation allow the loan to be obtained, this is to be preferred» says the consultant.

Will the trend continue? “The prospects are positive, but the tax department is the main unknown factor. The real engine that is driving the building interventions is represented by the generous deductions, certainly not from the foresight or the ecological propensity of the owners. And, in the absence of these reductions or with lower rates, the cost / benefit ratio should be reviewed “, concludes Romano di Consultique.