Property Price 2022: Calculation and Best Current Price

Property Price 2022: Calculation and Best Current Price

Property Price 2022: Calculation and Best Current Price

What is the mortgage rate? How is it calculated? How do you get the best price? Everything you need to know before you borrow.

Determined by the banking institution or credit institution, within the limits of the ceiling imposed on them by the Bank of France, mortgage rates particularly affect the total cost of the loan and the amount borrowed. Since early 2012, real estate prices have begun to fall, which is not without consequences for the borrower, but they have risen slightly since early 2022.

Since January 1, 2022, the maximum debt ratio is binding on banks, and it should not exceed 35%. The maximum repayment period of 25 years is also binding. However, it is possible to increase it for two years in the case of off-plan purchase before the end of construction or work that represents at least 25% of the purchase cost when buying an old dwelling. However, banking institutions can dispense with these rules in 20% of files. These exceptions must concern at least 80% of households purchasing their primary residence, and 30% of first-time buyers.

The home loan rate is expressed as a percentage of the loan amount. This must be clearly stated by the lender in offers and credit agreements, as provided for in Article L313-2 of the Consumer Code. More specifically, it is the global effective rate TEG, also called the global annual effective rate APR, which must appear in advertisements and contracts. It is determined by the banking institution or credit organization. It cannot exceed the rate of wear, a ceiling set by the Bank of France. TEG refers to the total cost of the loan and includes, in addition to the base rate, all costs (application fees, commissions and insurance premiums, in the case of obtaining mortgage loan insurance with the bank, among others).

To find out the best real estate rate currently offered by banks according to the duration and quality of the borrower’s profile (amount of savings, quality of bank account management, amount of income, presence or absence of overdrafts, use or non-use of consumer credit, etc.), see the table below.

Real estate prices offered by banks as of 02/08/2022
Period Excellent rate very good price good average
7 years 0.31% 0.57% 0.74%
10 years 0.5% 0.67% 0.87%
15 years 0.6% 0.89% 0.01%
20 years 0.7% 1.02% 1.16%
25 years 0.95% 1.17% 1.33%

These rates do not include the borrower’s insurance. If you already have an existing home loan and a good track record, take a look at the rate you got compared to those listed and see if you qualify to renegotiate your home loan.

Real estate prices are constantly changing. Since the 2008 crisis, they have fallen dramatically. In fact, at that time, the average rate over 20 years exceeded 5%. The average loan rate (excluding insurance and guarantee cost) fell for the fifth consecutive month to 1.20% in November 2020. But it rose again at the beginning of 2022. It experienced a period of increase between the fourth quarter of 2010 and the first quarter of 2012 as shown in the graphic graphic below.

The decline in mortgage rates made part of the demand solvent, hitherto excluded from the market, and improved the real estate purchasing power of borrowers.

Several parameters are taken into account when calculating the interest rate:

  • loan term : The latter refers to the repayment period granted to the borrower. The longer the last term, the higher the interest rate.
  • Borrower Profile : The higher the risk tolerance of the bank, which it assesses by looking at your income, your debt ratio and your personal contribution, the higher the rate of interest it will offer you
  • OAT . rate (in relation to the absorbable obligation du Trésor), in particular the 10-year OAT commitment, which is currently very low.

“Mortgage Loans – JDN”

The lower the interest rate, the lower the total cost of credit. So it is very important to get the best possible mortgage rate. In addition, the amount that the buyer can borrow depends, among other things, on the interest rate. Hence the importance of getting the most attractive real estate prices.

Note that the interest rate on the loan that appears in the sales agreement must be respected. Si l’acquéreur sollicite auprès de sa banque un crédit à un taux inférieur à celui inscrit au compromis et que celui-ci lui est refusé, il ne bénéficie plus de la condition suspensive, à ce quil signifir quer qué reut plus The good.

Banks sometimes try to attract customers by advertising very low rates. Then several precautions must be taken. You have to check that it is a fixed price. Getting a variable rate loan is more risky, especially when the rates are already very low. This can cause your monthly payments to vary beyond reason. It is also better not to risk getting a loan from an unknown banking institution.

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