Inflation: Getting a Mortgage, Is It Still Worth It?

Inflation: Getting a Mortgage, Is It Still Worth It?

While inflation is breaking records, some profiles still have an interest in getting a mortgage. (Pixabay/natttanan23)

The real estate market is constantly developing. With rising interest rates and accelerating inflation, not all profiles are eligible to borrow. What profiles can still benefit from the situation? This depends above all on the condition of the borrower and the possible development of his income.

Between accelerating inflation, increasing credit rates, and the rate of erosion that brokers consider too low, some profiles may feel neglected outside the real estate market. So, who can still benefit from this situation? Above all, what matters is the condition of the borrower and the evolution of his income, and the broker Vousfinancer indicates that he is carried over monthly

You better live with your money


“In times of inflation, it is interesting to buy because the monthly repayment of the loan remains constant for the life of the loan. So its relative weight decreases compared to other expenses, but especially in the general budget of the family if the borrower’s salary increases with the key to a lower debt ratio.

Determines Youfinance. I still need

“Income goes up, ideally as much as inflation, which is far from always the case.”


Salary increase is higher than inflation

Given a salary increase of 2.5% per year, the debt ratio for a base salary of 3,500 euros and a monthly loan payment of 1,000 euros rises from 28.6% to 22.9% in ten years according to the broker. The situation has clearly changed because the borrowing capacity of the French has declined with the increase in real estate prices.

“If the increase in the minimum wage in recent years still makes it possible to compensate in some cities for higher property prices thanks to lower prices also, this is no longer the case.”

confirms Sandrine Allonier, Director of Studies and spokeswoman for Vousfinancer.

rent reassessment

Investors have less to worry about. The revaluation of rents is actually linked to inflation by the rent reference index (IRL). After rising 1.61% in the previous quarter, the index now stands at +2.48%. An IRL cap of 3.5% set by the government. So it can still increase.

The increase in rents in times of inflation is still effective. Thus, for investors, all other things being equal, the monthly payment of the loan will remain constant for the life of the loan, but the rents used to pay it off partially increase, reducing the monthly saving effort.

Sandrine Alonier concludes.

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