Mortgage rate: continues to rise in July 2022


Mortgage rate continues to rise in July 2022
Mortgage rate: continues to rise in July 2022

Bank balances have fallen! What we see when reading this precious data is that real estate rates continue to rise. But this time, the increase was expected because banks traditionally raise their rates during the summer. Here’s why.

The traditional rise in real estate prices during the summer

When the summer holidays approach, banks usually choose it Raising rates to slow loan applications. This strategy allows them to avoid extremely long processing times for loan application files when we know that 50% of the workforce goes on vacation at this time of year.

So this increase was expected. The rates are as follows:









loan term

average

lowest rate

7 years

1.15%

0.65%

10 years

1.30%

0.65%

15 years

1.50%

0.90%

20 years

1.70%

1.10%

25 years

1.90%

1.30%

Source: Borrowing Scale

Increased wear rates

Another change in this month of July: increased erosion rates. This was thus created in 2.57% for loans over 20 years compared to 2.4% last quarter. But this increase is considered insufficient by credit professionals. The government had to reconsider the method of calculating the rate of erosion to adapt it more to the realities of the market, but it finally backed down.

The usury rate complicates the situation for banks that find themselves stuck between the rising cost of money, with a 10-year OAT that took 200 basis points in 7 months, and their margin. This situation forced some banks to Selling at a loss and others are temporarily out of the credit market.

The importance of preparing your file in advance

In this complex context of banks, some do not hesitate to make efforts and Offer discounts to attract the best profiles. But not all borrowers fall into this category. That is why it is recommended to prepare your file in advance. Here are some ways to boost your borrower profile:

  • Make a personal contribution of at least 10% to pay the documentation and guarantee fees;
  • Have custodial savings that can be mobilized if needed after acquiring the property;
  • improve your profile thanks to counterparties;
  • Provide proper management of its accounts.

A mortgage broker can advise the borrower on how to improve his chances of obtaining financing. What is more, the broker makes it possible to direct the borrower towards banks that continue to lend. Valuable help if you want to succeed in your real estate project.

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