In the first two episodes of this series we covered the basics of a first mortgage: how to weigh up the monthly payment and what to consider before choosing one. In this third episode we go further, because when people talk about a mortgage, attention almost always lands on the monthly payment — understandably, since that's what comes out of the account every month. But the payment is only part of the story. Real financial balance comes down to how much capital you tie up immediately, how much liquidity you have left, and above all whether you're building something else while paying off the mortgage. Because buying a home should never mean standing still.
How much should you actually put down?
In Italy, in most cases, the bank finances up to 80% of the property's value. The remaining 20% is the down payment you need to cover yourself. This is where the first common mistake creeps in: draining every last saving to put down as large a deposit as possible.
A bigger down payment does shrink the mortgage, yes. But it also shrinks your financial safety net. Our advice is always the same: better a slightly larger mortgage than an account at zero. Liquidity matters — for the unexpected, for future expenses, and so you don't have to turn to costly financing later on. A home is an illiquid asset; a current account isn't. That difference matters more than people think.
Which costs fall outside the mortgage?
Beyond the down payment, there are costs that don't get folded into the mortgage but need to be paid straight away: the notary, registration tax or VAT, the property valuation, the bank's processing fee and, if relevant, the estate agent's commission. On average, these expenses can easily reach 8-10% of the property's value.
The problem isn't that they exist. The problem is finding out about them after you've already decided to buy. A sustainable mortgage is one that accounts for every cost, not just the monthly payment.
The hidden costs worth knowing before you sign
They're not scams — they're simply things that aren't explained well. Think of payment collection fees, the running costs of the linked account, add-on insurance policies pitched as "necessary," or indirect penalties on early repayment. One simple rule applies here: if you don't understand a line item, stop and ask. Signing without understanding is the one truly irreversible mistake.
Why shouldn't a mortgage stop you investing?
Having a mortgage doesn't mean you stop investing. If anything, in our view, it means the opposite. We always recommend pairing the mortgage payment with a savings plan (a PAC, or accumulation plan), for three concrete reasons:
- You build capital while paying down the debt. Even with modest amounts, over time you accumulate a sum that works in parallel.
- You keep flexibility. That capital can cover future expenses, the unexpected, or, over the years, be used to lower the outstanding mortgage balance through a partial early repayment.
- You balance property and financial wealth. Your wealth doesn't stay concentrated in a single illiquid asset — you're building balance, not just a home.
The mortgage is a long-term debt. The savings plan is a long-term strategy. Together, if well calibrated, they can coexist extremely effectively.
The right question to ask
The right question isn't "should I pay down the mortgage faster or invest?" The right question is: how much mortgage can we sustain without giving up on building our financial future? Paying down debt alone gets you to the end with a home. Paying down debt and investing gets you there with a home and capital too. Those are two very different outcomes.
Buying a home is an important milestone, not the finish line. The mortgage is a tool, not a life sentence, and planning doesn't stop at the notary's desk. Those who manage to look beyond the monthly payment are the ones who, twenty years from now, find themselves with far more freedom of choice.
Glossary
- Property valuation: the technical appraisal of the property carried out by a surveyor appointed by the bank, needed to establish the value the mortgage is calculated on. The cost is almost always borne by the buyer.
- Partial early repayment: repaying part of the outstanding mortgage capital ahead of schedule. It allows you to shorten the mortgage term or lower the monthly payment, without paying off the loan entirely. On first-home mortgages, no penalties apply.
