Cities in Italy where mortgages are cheaper than rental housing

Caro Vita: cities in Italy where it is more advantageous to buy rather than rent real estate

October5,2023,13:26 Federica Petrucci

Price comparison gives a clear idea about the cities in Italy where it is more advantageous to buy a property than to rent it. What is more advantageous - mortgage or rent? Thanks to various simulations, Altroconsumo was able to compare prices for sale and rent in eight Italian cities, providing a clear picture of the current situation in Italy, where buying a property is more profitable than renting it..

"What's more beneficial - mortgage or rent?"?"

Considering the rise in mortgage interest rates, is it more advantageous to have a mortgage for purchasing a home or to pay rent? In an attempt to answer this question, Altroconsumo took into account various factors, starting with the stability of mortgage payments. An interesting fact that became evident from the calculations is that often the monthly mortgage payment is lower than the rent in many cities. However, it is important to note that banks almost never lend the full value of the property, limiting themselves to a maximum of 80% of the appraised value set by the appraiser. Additionally, one must consider the extra costs associated with purchasing a home. Those without initial capital are unlikely to afford investing in real estate, even if it is more advantageous than renting. To rent an apartment, one often needs to pay a deposit or several months' rent in advance, as stipulated in the contract, which is generally a smaller amount than the required down payment when buying a house. Another factor is that to obtain a mortgage, one must be considered reliable by the bank and be able to pay a monthly payment that usually cannot exceed one-third of the borrower's monthly income. That is, if the salary is 1500 euros, the monthly payment cannot exceed 500 euros. As experts advise, in such cases, it is easier to rent a small apartment while waiting to purchase a larger home (or there is always the option to request a rent-to-own agreement). This is especially true in cities where rental prices continue to rise (by the way, here is a ranking of cities with the highest rental rates for students).

Comparison of prices: where mortgages are cheaper than rent

The Altroconsumo study focused on 8 Italian cities, taking into account the cost of renting and selling real estate in different neighborhoods. Specifically, the following cities were analyzed: Milan, Bergamo, Brescia, Bologna, Rome, Turin, Naples, and Palermo. The analysis was based on a hypothetical purchase of a two-room apartment with an area of 60 square meters in three suburban areas. Then, rental prices for the same type of apartment were recorded. Finally, a comparison was made between the rent and the monthly mortgage payment for a first home at 80% for a term of 30 years. But where is the mortgage cheaper than the rent (and vice versa)? Here’s what the data says.

• In Milan:In the Farini area, the average cost of purchasing an apartment of about 60 square meters is approximately 240,000 euros, while renting the same type of apartment in the same area costs around 1,000 euros per month. If buyers were to apply for a mortgage of 192,000 euros for their first home, the monthly payment would be about 862 euros. In the Porta Romana area, the average cost of purchasing an apartment of about 60 square meters is approximately 280,000 euros, while renting the same type of apartment in the same area costs around 1,100 euros per month. If buyers were to apply for a mortgage of 224,000 euros for their first home, the monthly payment would be about 1,006 euros.