Mortgage well over 2%, with insurance
Nothing dramatic yet, but obviously it’s starting to do a lot. For over 6 months, the average mortgage rates have been, all the terms put together, up compared to last month. Rates doubled in just 5 months. But the rate hike is not over, far from it. This month, the acceleration of the rate hike is even stronger, with more than 16 cents increase over all maturities for mounted practices. Thus, in July, CAFPI customers were able to borrow on average at 1.48% in 15 years against 1.29% last month (+ 19 cents); 1.58% over 20 years versus 1.42% last month (+ 16 cents) and 1.75% over 25 years versus 1.57% last month (+ 18 cents).
According to the rates currently displayed by banking partners in some CAFPI regions, the best profiles can get very attractive rates, still below 2% (excluding insurance). Thus, for very good profiles (substantial contribution and high income), the rates charged by the banking partners are 1.30% in 15 years against 0.90% last month (+ 40 cents); 1.45% over 20 years versus 1.10% over 20 years of last month (+ 35 cents) and 1.55% over 25 years versus 1.30% over 25 years (+ 25 cents).
|Credit conditions||Maximum rate||Average rates||Minimum rate.|
|25 years old||2.76%||2.11%||1.96%|
|Updated the 07/29/2022|
. Rates excluding compulsory and optional insurance. Average market rates (with 20% contribution), calculated on the statements of mortgage brokers. Indicative data only.
Expectation of falling house prices
Property prices are falling. This is not yet visible in the published indicators, because the lag effect is several months. However, many professionals confirm that the buyers who manage to obtain financing are now the masters. Sellers are forced to lower prices, sales times are lengthened. But prices are not yet sharply falling. A drop in property prices of around 10% and 15% would be healthy, the housing bubble must weaken.
Collapse in credit applications
All credit indicators are red: rates continue their rapid rise and the amount of loans granted is falling (-12.5% in the second quarter, year on year), according to the latest data from Crédit Logement. The latter also predicts a 15% drop in 2022 for credit generation (accepted offers). On the ground we are witnessing a gradual freezing of real estate loans. Since the beginning of the month, it is 1 in 2 files that are experiencing difficulties due to the wear rate! This is 2.57% for loans of 20 years or more, but it should be remembered that it includes the costs of taking out guarantees, administrative costs and the cost of the borrower’s insurance. Many banking networks have openly sidelined rather than lending at a loss.
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