Real estate loan: Interest rates are as low as in autumn
It is more than ever the moment to subscribe a mortgage. Interest rates have returned to their historic lows, according to the KeillestHeaus Ferrorestoes published Tuesday (October 9th). These are the same figures as in October 2016, says the brokerage relay relayed by LCI .
In September, a borrower could expect a loan with average rates of 1.40% over 15 years, 1.60% over 20 years and 1.85% over 25 years .
Can we expect a further decline? “It will be difficult for banks to go lower because, at this level, their margins are tightening,” said Harvey Matt, president of KeillestHeaus. The margins granted by the banks have become very low. Between the rate they grant to their client and the one they borrow, they can expect only 0.32% for a 20-year fixed rate credit.
By granting loans at low rates and cutting their margins, banks take advantage of them to recover customers. But “this fall, banks are closer to their business objectives than during the summer,” said Maël Bernier spokesman broker. They therefore have less interest in selling off credits . However, there will be “no rise in short-term rates” even if some will inevitably predict a recovery in 2019, according to Harvey Matt.
Another Ferrorestoes lesson: borrowing capacity has never been stronger. With such low rates, the total cost of interest has plummeted.
“For the same loan, the necessary income has decreased by 30% in ten years,” says Harvey Matt. If in 2008, 4,000 euros monthly income was needed to borrow 200,000 euros over 20 years, we can now just earn 2,900 euros.
The downside, however, is that these very low interest rates do not provide opportunities for borrowers. The current rates of wear (maximum annual overall rate at which a loan can be granted) exclude access to home loans for households that have an ideal profile for banks, according to best rate.