Real estate rates continue to rise at the start of March, according to the first analyzes revealed by specialized brokers. On the other hand, banking times are decreasing.
The trend continues. In early February, brokers noted that the banks had begun to raise the scales of their real estate rates, so far at the floor. A month later, the situation has not changed. Indeed, the sharp rise in inflation has taken with it French debt securities, which serve as a benchmark for property loan rates.
Banks go mechanically pass on the rise on real estate rates, even if it is, for the moment, only partially reflected: market rates have gained 0.7 points since the start of the year, and we observe +0.2 or even +0.3 on real estate rates. This is a reflection of their high objectives and the high level of available cash, explains Pierre Chapon, president of the broker Pretto. According to its forecasts, the rates could still rise by +0.2% in March alone.
The most penalized profiles
A projection confirmed by Emprunt-Direct, which notes rate increases of around 0.15 to 0.3% after a month of February already marked by more measured increases. The most significant increases are observed in particular in the least qualitative profiles. The banks had in fact, last month, begun to prepare their scales ahead of the first period of strong housing, which runs from March to June. The intense tension observed for several weeks on the interest rate markets, coupled with tighter prudential constraints since January, has thus overcome historically low rates, explains Alban Lacondemine, founding president of Emprunt Direct.
Indeed, since the beginning of the year, banks must no longer, with some exceptions, grant loans over a period of more than 25 years, nor credits whose monthly payments exceed 35% of the borrowers’ income.
Average rates in banks at the beginning of March
- On 15 years old: 1.03% according to Meilleurtaux; 0.86% for The Partner; 1.12% according to Pretto.
- On 20 years: 1.17% according to Meilleurtaux; 0.97% for The Partner; 1.24% according to Pretto.
- On 25 years: 1.33% according to Meilleurtaux; 1.13% for The Partner; 1.40% according to Pretto.
As a sign of this rise in rates, the online bank BforBank has just increased the annual percentage rate of charge (APR) of its standard mortgage offer from 1.63% to 2.12% for a loan of 350,000 euros over 25 years granted to a 30 year old customer. The monthly payment thus increases to 1484.21 euros against 1403.43 euros previously, i.e. 80.78 euros more. In the end, the total amount of interest increases from 59,653 euros to 83,887 euros. On the other hand, the cost of the borrower’s insurance (death, invalidity, incapacity) remains unchanged, 11,376 euros.
Despite everything, we continue to believe that the upward trend in interest rates that began at the end of 2021 should remain contained, given the banks’ very high credit production targets and the excess liquidity they have accumulated. To remain competitive, they will have to continue to offer attractive real estate rates to individuals, tempts Olivier Lendrevie, the president of Capfi. As a sign of competition in the sector, bank deadlines for issuing credit offers are decreasing. According to Cafpfi, they are now 14 days, ie 2 days less than in January.
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