Soaring real estate rates can be scary. The usury rate, the maximum at which banks can lend, is close to 6%. A bank has already crossed the 5% mark over 25 years. Is it still possible to borrow less than 4%? Yes, according to credit brokers, even if the banks’ scales are clearly on the rise.
Do you want to borrow the return or the fall? Should we already panic in the face of ever-higher mortgage rates? If we have received 5% scales, they are not representative of the current market situation, reassures Mal Bernier, director of communication at Meilleurtaux, this Friday, September 1st. They should be considered as indicators sent by banks which, in reality, do not want to lend.
No decline from early September this year
It was a press release from the broker Vousfinancer broadcast on August 29 that set the fire to the fire: In a scale, a bank now even offers loans at 5.05% over 25 years, a first since 2008, announces the network. THE first bars revealed by the banks for the month of September are up 0.10 0.35 points: Traditionally in September, when there are fewer real estate transactions, the banks lower their credit rates to capture new customers and meet their credit production targets for the year. This year, we see that the situation is quite different and that the banks are no longer at all in this strategy, quite the contrary explains Sandrine Allonier, spokesperson for Vousfinancer.
We’ve only received three bars so far.
Despite these worrying initial indicators, the spokeswoman for Empruntis Ccile Roquelaure also stresses that it is still too early to establish a reliable barometer of rates for September: We have only received three barometers for the moment and we know that we are going to receive many.
What average rates on September 1? The first trends…
At this stage, few brokers deliver an average for September, while waiting to receive more barmes from their partner banks. Here are the first indications. MoneyVox will publish a more detailed barometer after the start of the school year.
- On 15 years old: 4.05% according to Artmis Courtage, 3.79% according to Pretto, 3.85% for VousFinancer, or 3.87% at Cafpi over the past weeks.
- On 20 years: 4.20% according to Artmis Courtage, 3.96% according to Pretto, 4.05% for VousFinancer, or 3.59% according to Cafpi on August 31.
- On 25 years: 4.35% according to Artmis Courtage, 4.14% according to Pretto, 4.25% for VousFinancer, or 4.09% for Cafpi at the end of August.
Average rates noted by the brokerage networks, based on the scales provided by the banks. They do not take into account the cost of borrower insurance.
We are still far from 5%!
First observation: in this period when households are indebted in (very large) numbers over periods close to 25 years, taking out a loan for a shorter period only offers you a moderate advantage in terms of the rate.
Moreover, if a bank displays a rate that exceeds the symbolic cap of 5% to 5.05% over 25 years, according to VousFinancer, this reappearance remains very marginal to date, as underlined by Julie Bachet, Managing Director of VousFinancer. On average, the scales of those who lend are around 4% over 20 years, notes Mal Bernier. Thus the offers said by Meilleurtaux over the last 30 days are displayed on average 3.76%, all hard combined, we are therefore far from 5%! As always, it all depends on the quality of your file, but good files still unequivocally land rates below 4%even if the trend would be a generalization of a rate close to 4% for a loan over 25 years.
Ccile Roquelaure, from Empruntis, confirms on the other hand that she anticipates an upward trend, even if it is too early to quantify it precisely: The scales expected for this beginning of September should show average increases between 15 and 25 basis points according to the establishments according to our latest information.
Barometer of home loan rates – September 2023
Credit rates around 4% are attractive rates
The new increase in the usury rate, with a maximum of 5.56% for the longest loans, beyond 20 years (insurance rate included, in particular), allows banks to significantly increase their rate grids if they wish. Real estate credit is back to its 2010 rate levels and real estate prices are beginning to fall in certain regions, this is a sign of market stabilization, observes Pierre Chapon, co-founder of Pretto. This decline is more marked in the major French cities, some observers note a price drop by more than 8% in Lyon in one year and by 7% in Bordeaux, as well as a slight drop in Paris. Borrowers who can still be financed in these areas therefore have a slightly larger window of access to property despite the rise in interest rates.
Borrowing above inflation is not an abnormality either.
Credit rates around 4% are attractive rates, insists Caroline Arnould, CEO of Cafpi. Remember that, in the 1980s, it was normal to borrow two figures: 17.6% in 1981 as an example. Borrowing above inflation is not abnormal either. In the 2000s, rates were around 5% and inflation below 2%.
Rates will continue to soar. But without acceleration, judge the brokers. There’s no reason to rush… but don’t put off your real estate project for too long. With this very rapid rise in wear rates and the continuation of the European Central Bank’s policy of raising key rates to curb inflation, we are maintaining our rate scenario of 4.5% between now and the end of the year, concludes Julie Bachet, from VousFinancer, for from 5% at the start of 2024.
FIND THE BEST RATE FOR YOUR REAL ESTATE PROJECT