Real estate credit: rates continue to fall

Since January 2018, there has been a continuous decline in mortgage rates. Moreover, the latter are currently at the bottom of the fierce price war being waged by the banks. Indeed, according to the Banque de France, this product, considered to be the call offer par excellence, continues to decline. On the other hand, the period of cheap credit is still relevant, which is certainly good news for future buyers. Thus, it would be wise to obtain a quick loan now to carry out your real estate projects. In this article, let’s discover together many more details on this subject.

mortgage rates

According to the Banque de France, mortgage rates fell until last September to reach 1.51% on average, against 1.53% in August. Although the difference is slight, it is actually very significant when estimating properties. In addition, these figures which have been disclosed, corroborate those published by the Observatoire du Crédit Logement/CSA a fortnight ago. Indeed, the latter reported an average cost of borrowing of 1.43% without taking into account insurance and the cost of securities.

Stalled renegotiations

Despite this low rate, there is stagnation in credit renegotiations. Indeed, the Banque de France indicates: “The share of renegotiations within the whole production of housing loans reached 14.9% in September, its lowest since 2014”. However, the director of bank relations for the broker Vousfinancer, Sandrine Allonier confirms that: “The vast majority of loans that could be renegotiated have already been renegotiated”.

However, the context could well change since Vousfinancer has noted in recent weeks a shift in the pricing policy of French banks. Thus, still according to Sandrine Allonier “September is usually the month for interest rate cuts because there are a lot of transactions at this time of year, but this time the cuts were very moderate. In October, some banks also increased their scales”.

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Lower purchasing power

Despite this drop in mortgage rates, the rise in real estate prices is not compensated. Indeed, it is because of the fact that demand is running out of steam that the banks have decided to lower the rates with loans over much longer durations. In reality, households are now finding it much more difficult to keep up with the very sharp rise in prices. In the first quarter of 2018, according to data from notaries, we deciphered +3.5% over one year.

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In addition, the Observatory makes an important remark after comparing the evolution of the rates with that of the prices of the LPI / SeLoger barometer. This is the decline in the purchasable surface area of ​​households in 73% of cities with more than 100,000 inhabitants. Indeed, between the second quarter of 2017 and that of 2018, buyers lost 6.5 m2 of purchasing capacity in Bordeaux and 5.2 m2 in Paris.

Read also: Compare mortgage offers: how to do it?

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