Is it really time to buy? This is the question that all potential purchasers of real estate ask themselves. A good reason since the rate of borrowing evolves constantly impacting the cost of credit. Update on the mortgage credit rate in 2018.
An extremely low rate
While the average mortgage rate rose slightly in 2017 from its lowest level (1.31%) in November 2016 to 1.47% in February 2018, it remains particularly attractive for buyers. Borrowing therefore still costs very little and most banks are upgrading by offering gross rates below 1.90% over 20 years.
A rise in rates to anticipate?
Admittedly, inflation, which stands at around 1.3% in the spring of 2018, could push banks to increase their borrowing rates. Admittedly, the Bank of France and the regulators of the European Union encourage the financing organizations not to sell off their products.
Admittedly, the liberalization of borrower insurance could lead to compensation via rising property rates. However, banks have set ambitious targets for 2018 in terms of volume of loans. This generates competition between lenders who therefore always offer very low rates to remain competitive. The rise expected at the end of 2018 should therefore be very moderate.
A haircut to further limit the cost of credit
In order to attract the best clients, banks are ready to apply haircuts to the safest borrowers. Also, some borrowers who have an excellent record (sustainable income, personal contribution …) can be offered rates of less than 1%, or very close to 0% for short-term loans. Through this almost free credit, banks hope to sell other products (insurance, financial investments) to their new customers to restore their margins.
Low rates that allow the emergence of new formulas
The rates are so low that more and more funding organizations offer their clients loans that can extend over 30 or even 35 years. Admittedly, borrowers will not benefit from a rate lower than 2%, but this extended period allows them to limit the amount of monthly payments.