Trasparency

To understand the true cost of the loan one must consider, in addition to the interest rate, further items of expenditure: for example, the costs of setting up, changing, discharging; costs of collection; costs of brokerage by third parties; tax expenditures and insurance; and other expenses contractually linked to the transaction.

Regarding costs, the mortgage contract and its epitome document must include a T.A.E.G. (tasso annuo effettivo globale, or effective overall annual rate), being defined as the total cost of provision of credit to the consumer expressed as an annual percentage of the credit granted. The T.A.E.G. includes interest and all costs to be incurred in using the credit and represents the weighted average cost of the mortgage.

In addition, banks are required to provide customers, before signing of the contract, with a standardised summary, which allows for a simpler and more intuitive comparison of the conditions of the mortgage.

Under the new national rules on the transparency of banking transactions and services, banks are required to make available to customers a "fact sheet" which must include, among other things, the economic conditions of the transaction and the terms of the contract that regulate it.

Before signing, the customer also has the right to receive a complete copy of the contract in order to be able to evaluate its contents.

The contract must be accompanied, by express provision of the law, by a "summary document" designed to provide the customer with a clear overview of the most significant contractual and economic conditions; this must also include the TAEG.