Bad news for those looking for a loan to finance a real estate purchase, the rise in rates is confirmed.
At the broker Pretto, real estate rates thus recorded an increase of 20 basis points on average, over one month: “Our estimate is 1.34% over fifteen years, 1.44% over twenty years and 1.58% over twenty-five years. For the best profiles, the possibility of borrowing below 1% is getting further and further away: 1.18% over fifteen years, 1.29% over twenty years and 1.44% over twenty-five years”, says the broker.
The trend is general. “In the coming weeks, the rise in rates will continue. A national bank announced to us an increase in its scales of 20 to 25 centimes last week”, says Cécile Roquelaure, Director of Studies at Empruntis. On the scales received and in force in April, this broker notes increases in nine out of ten cases.
These vary between 10 and 30 basis points, depending on the institution and the duration. At present, the average rate over twenty years is 1.35%, an increase of 35 basis points since the beginning of the year. Over this same period, the lowest rate reserved for the best profiles remains, as in March, at 0.90%.
“Banks pass on the increase in their refinancing costs in a heterogeneous way”, notes Cécile Roquelaure. The rate of OATs (bonds assimilated to the Treasury), the traditional benchmark for real estate rates, has risen by around 70 cents since the start of the year. “Two strategies are observed: either the banks have made a significant increase in one go and are maintaining their rates for the moment, or they favor a rise in stages of 10 to 15 cents, remaining vigilant to new developments”she believes.
Rates above 2%
At Vousfinancer, the rate increases for all the bank scales received range from 10 to 45 basis points. This broker observes that these increases concern, most of the time, all profiles but, in certain banks, more the less good profiles, with the lowest incomes, to whom we now sometimes offer rates higher than 2% over twenty and twenty-five years… Thus, at Vousfinancer, the average rates offered increase in April to 1.25% over fifteen years, 1.45% over twenty years and 1.65% over twenty-five years. The rates for the best profiles are also rising, while still remaining attractive: 0.90% over fifteen years, 1% over twenty years and 1.25% over twenty-five years.
“The ten-year government borrowing rate has returned to its level of April 2017, when banks were lending on average at 1.70% over twenty years, against 1.45% currently. The banks try as much as possible to limit the rise in rates or to make it as gradual as possible, by sending new scales every fortnight for some, with limited increases. However, in this context, the movement is likely to continue in the coming weeks, even though with the current wear rates, the rates displayed on certain scales systematically lead to refusals”, analysis Sandrine Allonier, director of studies at Vousfinancer.
“At the same time, the wear rates have been revised slightly downwards, which is not necessarily good news”underlines Ludovic Huzieux, co-founder of Artémis brokerage, who notes, in April, an increase in rates of between 20 and 40 basis points according to the banking establishments.
The usury rates (which differ according to the type of loan, and which are calculated each quarter by the Banque de France) correspond to the maximum levels at which banks are authorized to lend. In practice, they include the interest rate, death and disability insurance, the guarantee, as well as administration and brokerage fees.
These rates fell slightly for home loans on 1er April, for fixed-rate loans of twenty years and over, from 2.41% to 2.40% . The very low level of usury rates risks closing the door to credit for certain candidates. ” If the increases continue this quarter with the same rapidity as in recent months, real estate rates will come very close to the attrition rate, which will de facto exclude many households warns Pierre Chapon, President of Pretto.
Fewer mortgages
Tighter credit conditions are already weighing on the real estate market. Pretto notes a 16% drop in purchase plans between February and March 2022. The Banque de France’s advanced estimate for March shows a slight drop in CVS monthly production of housing loans (23.2 billion euros) compared to February.
“Despite a promising start to the year on the real estate market, since February 24, the Russian-led war in Ukraine blows a wind of pessimism on the French real estate market, and more broadly on the economic situation of France”, indicated Ludovic Huzieux on March 23, during the presentation of the Artémis brokerage barometer on the French and real estate.
” In effecthe continued, this new study reveals that 73% of French people are pessimistic about the economic situation in France, a feeling up 9 points compared to September 2021, and a majority of French people consider the current situation to be unfavorable for borrowing (52%, + 11 points vs September 2021). » And the situation has probably deteriorated since then.