Since their historic low of June 2013 at 2.89% (excluding insurance and security costs), some real estate professionals feared a rise in interest rates in 2014. But rest assured, according to the Housing Credit Observatory (OCL), they will remain low this year again, even if the candidates for the loan may be faced with disparities according to the regions. To find out more about the current rate level, it’s here!
Rates in general
To cover all or part of his property purchase or work related to an existing property, we use debt financing: mortgage. For those of you who have a project of this type, lowering the rates can make your process easier. Indeed, if one of the major criteria for the purchase of a property remains the price per m 2, the borrowing rate commits you, it, over a long period and ultimately turns out to be more decisive. For example, a 0.5% increase in the credit rate cancels the advantage of a 4% decrease in the price per m 2.
This is important information for all those who wish to take the plunge and make their purchasing plans a reality because, as the OCL confirms, now is the right time to buy more than ever. After a slight increase in the second half of 2013, credit rates stabilized in the third quarter of 2013 and fell by 0.4 points in one month to reach an average of 3.04% excluding insurance, all loan terms combined, in January 2014. This moderate decline was notably maintained by the strong competition between bank branches.
Trends and perspectives
A trend that seems likely to continue because, according to a study by the Observatory of loans to households, intentions to take out a mortgage in the first six months of 2014 are improving: 4.5% of households intend to use it, against 4.1% in 2013. Note, however, that banks are becoming more and more demanding and that it is now easier to use loans over shorter periods, the average duration of loans continuing to decline to settle at 203 months in January, or seventeen years. A phenomenon which testifies to a moderate withdrawal of first-time buyers, who traditionally borrow over longer periods. In fact, to make their purchase project a reality, they will need to have a minimum personal contribution of 10 to 20%, more than ever required.
Of course, it is the banks that set the rates and they do not lend to anyone. And depending on the region, you will not be staying in the same boat. According to the latest barometer from the Empronto broker, for a loan over fifteen years, they are 3.15% on average in the Southwest and 3.35% in the North. Between these extremes, the West is 3.15%, the Île-de-France and Rhône-Alpes at 3.20%, the East and the Mediterranean at 3.25%.
For its part, places Toulouse at the top of its latest list of mortgage rates in the ten largest cities in France. With 2.85% as the best negotiated rate over twenty years (excluding insurance), the Pink City is ahead of Marseille, Nice and Montpellier (2.95%). Nantes (2.97%) and Montpellier (2.99%) follow closely, just ahead of Paris, Bordeaux and Lyon (3%), Lille closing the march with 3.15%.
And you, have you noticed a notable difference in mortgage loan rates? Are you one of the future buyers who are still waiting to buy? Come and discuss it, the blog is there for that!