Some dark clouds are beginning to block the hitherto clear horizon of mortgage lending rates. Several banks are actually raising the bar in November. And the situation could get even worse.
The last rate cut before a crackdown? MoneyVox wondered return. According to the latest Crdit Logement / CSA observatory, which associates the main French banks, in September the average rate on new loans was 1.05%, the lowest level ever recorded, ie in 70 years. But the real estate credit party may be over.
Reading the press releases received from brokers since November 1st, it appears that home loan rates have hit a low. They increased quite sharply in November. The bars of the establishments are displayed progressions ranging from 10 to 20 points base, and this on all file types, indicates Empruntdirect.com. Increases up to 0.25 points for some, confirms Vousfinancer, who reportsat least 60% of the bars received are oriented upwards after several months of decline.
Thousands of euros lost
And a quarter-point revaluation is far from negligible. For a rate, excluding borrower insurance, which ranges from 0.85% to 1.10% in 20 years, the monthly payment for a home loan of 200,000 euros rises from 1,183.6 euros to 1,205.8 euros, or 22 euros more per month. The total cost of the credit is thus increased by € 3953.4 to € 17045, calculated by Vousfinancer.
If, according to the broker, the average rates offered range from 1% over 15 years, to 1.15% over 20 years and 1.40% over 25 years, the lowest rates, for the best profiles, remain record levels. , always below 1%, whatever the duration (0.50% over 15 years, 0.70% over 20 years and 0.90% over 25 years). Indeed, the scales handed over by banks are published rates that can be revised downwards thanks to a discount system, according to borrowers. To put all the possibilities on your side, you have to meet several criteria: a CDI, a personal contribution of 10%, a minimum leverage ratio and good account management.
Average rates in banks in early November
- ON 15 years: 0.82% according to Meilleurtaux; 1% to finance you; 0.88% according to Le-Partner.
- ON 20 years: 0.98% according to Meilleurtaux; 1.15% depending on Youfinance; 1.01% according to Le-Partner.
- ON 25 years old: 1.21% according to Meilleurtaux; 1.40% depending on Youfinance; 1.19% according to Le-Partner.
Even though most banks have raised their rates, it is too early to say that the era of low rates is definitely over! We will have to wait to see if these increases will generalize and if they will settle in the long term, or if they will intervene only at the end of the year, at which time the banks still have many practices to process, some of which even be counted for the year 2022, he explains. Julie Bachet, general manager of Vousfinancer.
In any case, the situation is becoming more delicate for the banks. From January 2022 they will have to respect, under penalty of fines, the rules of the High Council for Financial Stability (HCSF), unveiled in January 2020, to avoid a boom in real estate credit. They foresee the compliance with two main rules for the borrowers file: no monthly payments exceeding 35% of the monthly income and a debt exceeding 25 years maximum. Only 20% of files can delete these principles
More rate hikes?
The now binding recommendations add to a more tense context on the financial profile of households, due to high prices and a possible insolvency of the latter in the event of an even minimal rise in interest rates. Added to this is the caution of banks deriving from the progressive disengagement of state support, the inflationary effects of the recovery and the future consequences of companies’ repayments of state-guaranteed loans. The end of 2021 should therefore mark a accentuation of the change in banking policywhich could also extend into the first half of 2022, anticipates Alban Lacondemine, founding president of Emprunt Direct.
In his latest home loan observatory, Meilleurtaux communications director Mal Bernier has already pointed to a number of threats to low interest rates. He explained, beyond the new regulations, that tariffs should increase slightly, from 1% on average today to 1.25% or 1.30% in January. A forecast based in particular on the increase of OAT 10, or the debt securities of the French government on which the change in interest rates is partly correlated, but also on consumer prices which jumped by 2.6 last month. % year over year. However, Mal Bernier remembered this caution is a must: there have been precedents, in recent years, where logic wanted rates to rise and where they continued to fall.
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