According to the broker Meilleurtaux, mortgage rates have now returned to their 2015 levels. This inevitably has a significant impact on borrowers.
A fall of 32.1% in the production of real estate loans over a quarter. A few days ago, the October 2022 Crédit Logement observatory reported a sharp drop in demand. In its 35th observatory on real estate credit released on Tuesday, the broker Meilleurtaux draws a similar conclusion: if the real estate market held up well in the first quarter of the year, the trend is being reversed. due to rising interest rates.
Over one year, between October 2021 and October 2022, the average rates over 20 years went from 1.10% to 2.30%. Specifically, the broker reports that in October 2021, 30% of offers posted by banks were at a rate of 0.90%, 44% at 1.10%, and 19% at 1.30%. Since the beginning of October 2022, the scales displayed by the banks have been for 40% 2.30%, 20% 2.50% and 12% 2.70%. More than 7 barmes out of 10 are now displayed between 2.30% and 2.90%.
30,000 euros less in one year
Inevitably, the rise in rates has an impact on the borrowing capacity of households. Meilleurtaux thus gives the example of a couple with 4,000 euros in net income per month with 0.34% 50% insurance on each head. The couple can therefore repay up to 1400 euros per month with a maximum debt ratio of 35%.
Real estate credit: how much can you borrow when you earn 2000, 3000 or 4000 euros per month?
If, in January 2022 with a rate of 1.10%, the couple could borrow up to 285,000 euros, the reality is quite different a few months later. With a rate of 2.30% in October, if the couple wants to borrow the same amount, their monthly payments then rise to 1,563 euros and their debt ratio reaches 39%, beyond the authorized limit. In the event that this couple still wishes to borrow with a monthly payment of 1,400 euros, his borrowing capacity increases to 255,000 euros, or 30,000 euros less in 10 months. Another data provided by Meilleurtaux clearly shows the increase in the cost of credit: in January 2022, a monthly payment excluding insurance for a classic loan of 200,000 euros at 1.20% was 933 euros, for a cost of credit (excluding insurance) of 23,976 euros. In October 2022, for the same loan, the borrower must pay 1040 euros per month. That is a monthly increase of just over 100 euros, for a total cost of 49,703 euros.
save up to 70% on your borrower insurance
Inevitably, the phenomenon is likely to have an impact on the number of real estate transactions. If the million properties sold will still be exceeded in 2022 thanks to a very good start to the year, Meilleurtaux anticipates a much more gloomy 2023. for comparison, while in 2015 the average rates over 20 years were 2.42%, the number of transactions was 769000 (against 1.17 million in 2021).
Real estate: towards a fall in prices in 2023?
This decline is partly explained by the inability of some households to access credit today. Between January 2021 and October 2022, the number of files respecting the new rules for the granting of a mortgage, namely a debt ratio of 35% and a maximum borrowing period of 25 years, increased from 71, 65% 58.41%. And the number of unfinanable files has risen from 21% to almost 30% over the same period. Today, one file in three exceeds this debt ratio and is no longer financeable at all, confirms Mal Bernier, the spokesperson for Meilleurtaux. And things are not likely to improve in the coming months. Like Cafpi a few days ago, the broker Meilleurtaux expects to see the scales of banking establishments exceed 3% on average over 20 years in the 1st half of 2023.