What kind of property can you afford on the average income in Italy?

According to an analysis carried out by Tecnocasa based on Istat data, the average annual family income in Italy is €35,995 , equivalent to about €2,999 per month . The question that many Italian families face is: what kind of property can they buy with this level of income?

To answer this question, experts conducted a model calculation of the mortgage, taking into account the following parameters:

• Loan term : 25 years
• Average interest rate : 3.70%
• Maximum mortgage payment to income ratio : 30% (i.e. maximum 900 euros per month)
• Loan to Value (LTV) : 80% (i.e. the bank finances 80% of the cost of the property, and 20% must be paid by yourself)

Based on these conditions, a family with an average income can afford to buy a home worth 220,000 euros , taking out a mortgage with a monthly payment of 900 euros .

How much money do you need to have to buy a home?

Despite the availability of mortgages, buying an apartment requires significant initial costs. To purchase a property for 220,000 euros, you will need:

• Initial payment (20% of the cost): 44,000 euros
• Bank fees (for reviewing the application, property appraisal, opening a loan) : 1,500 – 3,000 euros
• Purchase taxes :
  • If the property is purchased from a private seller – 2% of the cadastral value
  • If the purchase is made from a developer (new building) – 4% VAT from the price
• Notary services : 2,000 – 4,000 euros
• Real estate agency commission (if used): 2-4% of the price (approx. 4,400 – 8,800 EUR )

In general, the required amount for the transaction can be from 50,000 to 60,000 euros (including the initial payment and all associated costs).

Problems and possible solutions

This analysis shows that even with the availability of a mortgage, buying a home requires significant savings . This is a significant barrier, especially for younger buyers and those without savings.

However, the market offers various solutions that help overcome these difficulties:

• Mortgages with LTV of 90% or 100% , which allow you to reduce the size of the down payment (available mainly to young people up to 36 years old)
• State benefits for the purchase of a first home
• Subsidized mortgage programs offered by some banks

The choice of mortgage type and real estate should be well thought out. It is important to consider financial capabilities and income stability in the long term. That is why it is recommended to compare different offers from banks and contact real estate professionals to optimize investments .