what are the consequences on the duration of the loans?

Unsurprisingly, lending rates continued to rise in 2And quarter of 2022, while remaining well below inflation.

To compensate for this increase, home loan conditions are being kept at levels never seen in the past.

Rapid progress in four months

At 2And quarter 2022, all the terms put together, the average rate on home loans is 1.40% (insurance excluded), against 1.12% of 1uh quarter of 2022, according to the Housing Credit Observatory / CSA.

In June 2022, the average rate was 1.52%, compared to 1.05% in June 2021.

“After a very moderate increase of 4 basis points during the first two months of 2022, the progression was faster by: + 42 basis points in four months, in response to the tensions that have increased in all financial markets. war in Ukraine “, underlines the Observatory.

Rates that remain well below the inflation level

In June 2022, the average credit rate was 1.36% over 15 years, 1.49% over 20 years and 1.59% over 25 years. While INSEE estimates the inflation rate at 5.8% over one year in June.

“All borrowers benefit from loans at rates well below inflation, which has never been seen since the late 1950s: the real interest rate on mortgages is largely negative, at an unprecedented level since 1949,” he notes the Credit housing / CSA Observatory.

Credit terms that get longer

At 2And quarter 2022, the average duration of the loans granted is 239 months.

“Since the end of summer 2021, the average duration of loans granted has remained at levels never seen in the past: this duration was 13.6 years in 2001 (163 months), it was set at 20 years in June 2022 (240 months)” , notes the Observatory. An increase that makes it possible to cushion the increase in credit rates, property prices and the level of personal contributions required by banks.

At 2And quarter 2022, 65% of bank loans for home ownership were granted for a period of between 20 and 25 years, “a share never seen in the past”.

Market deterioration

Due to the rise in interest rates, the war in Ukraine and the deterioration of household purchasing power, the number of loans granted decreased by 7.3% compared to 1uh mid 2022 compared to 1uh mid-2021 and 9% in 2And quarter 2022 compared to 2And quarter 2021.

What is the expected rate for the end of the year?

As inflation accelerates and uncertainty increases, the rise in mortgage rates will continue in the coming months.

According to the Crédit Logement / CSA Observatory, “according to the June scenario, the rate for 2022 would now be 1.55%, with 1.90% at the end of 2022. energy supply has increased significantly, the lending rate is expected to reach 2.25% at the end of 2022, for an average annual level of 1.60%. “

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