After many years stagnating at extremely low levels, rates are firmly on an upward trend. A fair return to normal?
All mortgage professionals recognize it: the rates charged in recent years were at “abnormally” low levels. This had the effect of attracting many buyers… but also of causing a rise in housing prices because of the cheap money. For the past few weeks, we have seen an upward trend in rates.
And, if we are to believe Maël Bernier, communication director of the Meilleurtaux site, “the rise in rates is indeed there and for good”. Consequence: “The bullish scales received since the end of March prove that borrowers will face a more complicated situation than that to which they had been accustomed for several months now”. Should we be worried about it? Midi Libre takes stock.
1. What are the upside levels?
“All profiles and all durations are concerned, from the average file to the excellent profile, notes one at Meilleurtaux. The rates go up more quickly than expected and the trend is confirmed day by day. between +0.15% and +0.45%”. The average rates are therefore around 1.20% over 15 years, 1.35% over 20 years and 1.50% over 25 years at the beginning of April.
But, “it is not at all impossible that we will receive other bullish scales which will further push up the figures observed at the start of the month”. In the region, the Meilleurtaux teams noted rates that are around 1.01% for a period of fifteen years. Against 0.89% in the southwest. And even 0.75% in the greater Lyon region.
2. Should we be worried?
Despite the rise, rates are still low. “It was to be expected. The rates were so low that they could only go up”, insists Julien Gros, within the Montpellier firm Crédit2L, specializing in credit renegotiation. He adds: “Even if the increase may seem brutal, the rates are still low, reasonable”.
Added to this is the reminder of the High Council for Financial Stability (HCSF), which imposed a rate of effort on borrowers limited to 35% of their resources. It was previously set at 33% of income. “Potentially, we can find a borrower today who could not be financed by a bank, recognizes Sébastien Baggio, director of the network at the Banque Populaire du Sud (BPS). Nevertheless, this remains rare.
But, above all, we have probably never needed to build a tailor-made project because our mission is to find solutions for our customers”. He also agrees: “Compared to the last 20 to 25 years, we are still on the fundamentally low and attractive bases for the client”. Finally, the head of the BPS recalls this essential element: “you must always compare the cost of money to inflation”. Result: “1.5% over 10 years compared to 3% to 5% inflation, it’s still a good deal for the borrower”.
3. Is the increase temporary?
Expert at the Nîmes firm Patrimoine Invest, Jean-Jacques Lafont believes that “the rise in rates is structural, it is not there for just a few months”. He insists: “we should live with rate hikes regularly in our everyday life”.
He also reminds us that real estate is a story of cycles. “A few years ago, we borrowed at rates of 4.5%, even 6%. So being, like today, below 2%, it remains very attractive and interesting to borrow”. He insists on the fact of “playing competition between banks”. And to achieve this, “the best thing is to rely on brokers who negotiate with bankers to obtain attractive rates. They are the ones who have the broadest view of the market”. Because “all banking establishments do not necessarily want to make credit”.
“It’s the right time to buy”
President of the Syneos network, a national real estate group headquartered in Saint-Jean-de-Védas, in Hérault, Hélène Fraysse believes that “now is the time to buy”. Indeed, she adds, “the rates should continue to increase to reach 2% to 2.5% by the end of the year, it is therefore advisable to take advantage of rates which are still quite low”. Especially, she continues, that “the rise in rates can lead to lower prices”. According to feedback from network agencies, “it would seem that candidates for purchase are currently showing a certain wait-and-see attitude”.
4. What are the “good” rates?
The Meilleurtaux teams have estimated what, in view of the observation of the different levels of rates practiced, what were the rates qualified as good all around the Mediterranean. For a term of 7 years, the “excellent, but rare” rate would be 0.69%. Otherwise, a “very good” would be 1.06% and a “good” at 1.16%. Over 10 years, it is, respectively, it is 0.75%, 1.07% and 1.2%. Over 15 years: 1.1%, 1.3% and 1.48%. Over 20 years: 1.23%, 1.43% and 1.55%. Finally, over 25 years (maximum duration): 1.35%, 1.57% and 1.65%. Note that most of these rates have been on the rise in recent weeks.
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