Immo: How are mortgage rates determined?

Immo: How are mortgage rates determined?


Immo: How are mortgage rates determined?
Immo: How are mortgage rates determined?

Upcoming real estate project? To estimate your mortgage rate, it is necessary to choose the type of rate: fixed, variable or even mixed. If this rate depends on the economic situation or the bank, it also varies according to the profile of the borrower.

Credit rates are still at an all time low

for Compare Mortgage OffersBorrowing rate is a good indicator. In fact, the higher the price, the higher the cost of credit.

A fixed credit rate is generally chosen by borrowers because it is more reassuring in the long run. The credit rate is fixed when the contract is signed and remains fixed during the term of the loan. upside down, The variable (or revisitable) rate develops according to a benchmark. Depending on the economic situation, the rate can be low and advantageous, as it currently is. This is also the reason why it is not so interesting to choose a variable rate.

In the event that the rate rises again, the increase will be limited to The usury threshold set by the Bank of France. The wear rate is the maximum not to be exceeded that protects the borrower from potential abuse and excessive debt.

You can also choose Mixed rate combines fixed and variable rates. The advantage is that the increase is limited and cannot exceed a certain ceiling. It is the compromise between fixed price and variable price.

How are mortgage rates determined?

To determine the mortgage rate, credit institutions take into account several elements:

  • prime interest rates set by central banks. It is calculated based on the inflation rate and reflects economic conditions.
  • Amount and term of the bank loan. The longer the loan repayment period, the higher the mortgage rate.
  • geographic location. The interest rate varies according to the region in which the real estate project is located. Interest rates are generally higher in the Ile-de-France region than in Auvergne, for example.
  • Borrower Profile. Personal and professional situation (salary, co-borrower, savings, other income) or the amount of personal contribution affects the rate of interest.

Finishing Credit Rating Estimation

To get an idea of ​​the credit rate at which one can borrow, there is a measure of mortgage rates. Free mortgage calculators are also available. Without obligation, they make it possible to calculate borrowing capacity or even monthly loan payments by testing different rate, amount or even term scenarios. To improve appreciation and make your real estate project a reality, Credit specialist support is recommended. Through a real estate broker, the borrower can benefit from sound advice and an optimal financing solution that suits his project.

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