Real estate loan: borrowing at 1%, the new standard?

The return of September is also the return of the real estate market. Credit brokers say banks are being offensive with further rate cuts to lure borrowers. So that credit at 1% is no longer a good deal but a standard in the making, even over the longest durations.

From 1.43% in February 2019, on average and all durations combined, to 1.17% in August 2019: the Credit Housing-CSA observatory confirms the exceptional level of real estate rates. The records are broken every month, but rates have also been clearly falling in recent weeks. Even if it delivers data with a certain delay, the Banque de France confirms this new drop-out: an average fixed rate of 1.35%, all durations combined in July, against 1, 51% in March.

More concretely, in this back-to-school period, the banks are once again posting declining borrowing rates, in order to seduce borrowers. To summarize the purpose of brokerage networks having published a barometer in early September, banks offer on average and without negotiation rates around 1.10% over 10 years of 1.30% over 20 years and 1.50% over 25 years.

Average rates charged in banks in September

Average rates charged in banks in September

Average rates, or market rates, based on the scales provided by the banks. These are only the rates observed, and not the rates negotiated by these brokerage networks.

Like every month, the averages announced vary from one broker to another. But all note a decrease of 0.05 to 0.10 point, approximately, for the average scales in September.

Beyond the three networks mentioned above, Fine Bank announces banks on the offensive in September (1.05% over 15 years, 1.25% over 20 years and 1 , 50% over 25 years on average), and the Central Finance Office reports a steeper decline in loan terms of 20 years, to 1.14% on average, against 1.42% on 25 years.

One observation: if the banks agree to lend over 25 years, or even more, this loan duration intended for more modest households and new owners remains the least attractive. , with a slightly higher rate.

A shy renegotiation window

A shy renegotiation window

With rates falling ever lower, brokers logically record increased activity on credit redemptions and renegotiations. Some borrowers are now buying recent loans, from 2016 or even 2017, which were considered to be loans obtained at record rates at the time. around 2%, says Sandrine Allonier, spokesperson for Good Finance, a network where requests for renegotiations increased by 40% in summer 2019 compared to 2018. Today these credits can be renegotiated to less than 1%! The biggest winners are those who renegotiate over short periods of time, at rates sometimes below 0.5% over 7 or 10 years

Alban Lacondemine, founding president of Loan-Direct, confirms that the significant rate reductions for the best files, in this return, allow to restore the appeal to the operations of repurchases of credit or renegotiations.

According to Banque de France statistics, the share of redemptions and renegotiations in the flow of credit files went up again in July: they represent almost 20% of files, compared to 17 % approximately in previous months.

Flat calm, new record or negative rates on the horizon?

bank

And then? Will rates go lower and lower, even if they are already approaching the floor? “ September 12, 2019 will be a pivotal date, ” insists Sylvain Lefevre, president of the Central Financing Office. The Capital Lender should indeed announce its measures to support the economy, which should prove to be very accommodating and move in the direction of the further decline in rates. Up to negative rates? The rates, now lower than inflation, already allow for enrichment through credit.

More extreme models, such as those applied in particular by Japan and by Germany have not so far proven themselves, and our French banking system is not not ready for such a shock.

Philippe Taboret, Deputy General Manager of Agree bank, also points to the crucial day of September 12 in his rate meteo, and is very optimistic for borrowers: In view of the political announcements and the market trend, by the end of the year all banks should align themselves with rates below 1% up to 25 years, and this, whatever the profile of the borrower. s by our banking partners. All the same, it slips a forecast for September or even fall: The rate at 1% could become the norm in the coming weeks.

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