The banks, which last year only granted real estate loans in small amounts, are more accommodating today. But they lend at high rates. At the end of 2023, loans over 20 years reached almost 4.50%. Since the start of the year, the drop in rates on the financial markets and renewed competition between banks have brought them back around 4% on average, and around 3.70% over 20 years for an excellent record, according to the credit broker Meilleurtaux. Some buyers, who had postponed their projects, are therefore regaining hope, even if they have to resign themselves to buying smaller or less well located than they would have been able to do a little more than two years ago, when the interest rates were around 1%.
Evaluate your repayment capacity
To take action, start by assessing, with your banker, the amount you can borrow at current rates. “The rule has not changed: the monthly loan payments must not exceed 35% of your monthly net income“, recalls Maël Bernier, spokesperson for Meilleurtaux. Banks have a small margin of maneuver to go beyond, but only for around 20% of loans, mainly for households buying their first main residence.
But they are more accommodating over the duration of the loan. “They agree to lend over 25 years more easily than a few months ago. Exceptionally, some even go up to 30 years”underlines Sandrine Allonier, spokesperson for the broker Vousfinancer.
To know. If you have consumer credits, the bank will count them in the 35% effort rate. This will further reduce your real estate loan options. Repay them early, if you can. Your latest account statements will also be looked at: avoid overdrafts.
Quantify your personal contribution
Before going to see your bank, you must also calculate the savings to invest in this project. The banks are a little less demanding than a few months ago on the amount of this personal contribution. “But you must have at least enough to pay the acquisition costs (also called notary fees), either approximately 10% of the purchase price of the property“, specifies Maël Bernier. Of course, if you have a larger prize pool, you can hope to get a better rate.
To know. “If you buy a thermal strainerthe bank may ask you for at least 20% of personal contribution, because the evolution of the price of the property in the future is more uncertain, or it will encourage you to include the work in the loan if your debt allows it.specifies Sandrine Allonier.
Can we take out other additional loans?
Other low-rate loans can sometimes complement your financing plan. Depending on your resources, if you have not owned your main residence for two years, the zero-interest loan helps, for example, to finance the acquisition of new housing in areas where the real estate market is tight or of an old home with work in a relaxed zone (20 or 40% of the operation within the limit of a variable ceiling depending on the geographical area and the composition of the household). Certain home savings plans (subscribed since February 2015) also provide entitlement to a loan at rates lower than traditional loans. Finally, depending on your resources, you can sometimes obtain a loan from Action Logement at a reduced rate for the acquisition or work (30,000 € maximum at 1% within the limit of 25 years -excluding insurance-)
Prospect the real estate market
By combining your savings and your credit, what housing can you buy? Fnaim (National Real Estate Federation) expects in 2024 to a more marked drop in prices than last year, where the market had stalled, sellers sticking to their positions, even without buyers. Today, some owners still overprice their homes, even if they don’t sell, hoping for a stroke of luck. Others, tired of waiting, have already reduced the price displayed, to attract buyers. Still others have not changed the advertised price, but are willing to accept significantly lower offers because they are beginning to be in a hurry. Must therefore visit, examine the market, discuss with real estate agentsto determine the right price for what you are looking for and not hesitate to negotiate what seems overvalued and has been on sale for a long time.
To know. Many buyers have not yet returned to the market. So you have time to think before making an offer.
Fight to get the best rate
When you have found the rare pearl, it will be time to encourage competition between banks.”Not everyone has the same desire to lend, some are more accommodating if you have little personal contribution, or if you want a loan over 30 years, etc.”, explains Sandrine Allonier. So you might as well knock on almost every door. A credit broker can do this for you, for a credit administration fee of a few thousand euros. “They can offer you a more attractive rate if you accept some considerations: insurance, opening additional accounts”, recalls Maël Bernier. For example, you can take out their borrower insurance… and then change it.
Banks willingly fight for fairly young borrowers, who promise a long commercial relationship. But older customers can also attract them, for example if they have savings to repatriate to the bank.
Take into account costs and unpleasant surprises
In your calculations, plan several thousand euros for the loan guarantee (often Housing Credit). When signing the deed of sale, you will also have to pay notary fees (8% to 10% of the purchase price).
To know : it is prudent to keep some money for possible work, the costs of moving, buying a car if you settle far from the city center, etc.
Rates expected to continue to fall
“This summer, the borrowers will undoubtedly find real estate loans around 3.5% over 20 years, and undoubtedly around 3.2% at the end of the year, if the European Central Bank lowers its rates, as the financial markets anticipate. But those who pay more today will not be able to renegotiate right away because it is only profitable when the difference between the rate of the new loan and that of the old one exceeds 0.7%. The savings on the cost of the loan must in fact be sufficient to compensate for the costs of renegotiation : early repayment penalties, new administration and guarantee fees, etc..”.
Thanks to Sandrine Allonier, spokesperson for the broker You Finance.
Don’t wait for a price collapse
“The housing supply is insufficient in France to meet needs. Demand remains strong and many French people want to buy, even if their purchasing power decreased with the rise in interest rates. This limits the potential drop in prices. Today, negotiations of 15% to 20% sometimes take place on housing put up for sale at prices disconnected from reality. Nevertheless, a quarter of properties are still sold without negotiation. And for others, it is rare to reach a 10% reduction. In fact, there are significant disparities depending on the city, and the quality of housing (top floor, faultless or not, etc.)“.
Thanks to Yann Jéhanno, president of the Laforêt network.
The real estate market in a few figures
- -1.7%: average drop in the price per m2 of houses in 2023 (Century 21)
- -3.4%: average drop in the price per m2 of apartments in 2023 (Century 21)
- 3.8%: lowest rate observed for a 25-year property loan (reserved for good applications)