The rise in the minimum wage of 3% since 2021, and 15% in 10 years, has led to an increase in borrowing capacity, favored by falling rates. According to a study, it is possible to borrow 107,000 euros over 25 years by earning the minimum wage.
How much can you borrow for a mortgage when you earn the Smic? While the minimum wage was raised by 0.9% on January 1, after a 2.2% increase in October, to reach 1269 euros net per month full time, the borrowing capacity with the minimum wage is now 107,210 euros over 25 years, according to calculations by the broker Vousfinancer.
An evolution made possible on the one hand, thanks to the rise of almost 15% of the minimum wage since 2012, ie 172 euros net per month, and on the other hand, due to the fall in real estate interest rates. They went from 4.3% on average over 25 years to 1.30%, i.e. a 3 point dropaccording to Vousfinancer.
Thanks to the fall in rates combined with the revaluation of the Smic, the borrowing capacity with the minimum wage has increased by 60% in 10 years and by 5% in 2021 alone! It is now possible to borrow more than 107,000 euros over 25 years by earning the minimum wage, compared to 66,500 euros in 2012, i.e. 40000 euros more. And as all cities have not seen their prices increase by 60%, in most real estate purchasing power has progressed, analyzes Sandrine Allonier, spokesperson for Vousfinancer.
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For a monthly payment excluding insurance equal to 33% of the Smic, by reimbursing a loan over 25 years at 1.30% with 10% down payment, the real estate purchasing power varies from 10.5 m2 Paris, 88.2 m2 Saint-Etiennea ratio of 1 to 9.
The cities where the purchasing power of the minimum wage is the highest are Saint Etienne (88.2 m2), Le Mans (67.9 m2), Brest (52.5 m2), Nmes (52.2 m2) Clermont- Ferrand (51.7 m2) and Le Havre (51.3 m2), which are the only ones where you can buy more than 50 m2 among the 25 towns studied by Vousfinancer. On the other hand Rennes, Bordeaux, Nice, Aix-en-Provence, Lyon and Paris, it is almost impossible to buy more than 25m2.
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