Mortgage Credit: Rates increased by an average of 10% (that's 16 basis points) in one month, and the 2% limit with insurance fell largely

Mortgage Credit: Rates increased by an average of 10% (that’s 16 basis points) in one month, and the 2% limit with insurance fell largely

Mortgage well above 2% with insurance

Nothing exciting yet, but he’s clearly starting to do a lot. For over 6 months now, average mortgage rates, all terms combined, have been on the rise compared to last month. Prices doubled in just 5 months. But the rise in rates didn’t end far from that. This month, the acceleration of rate hikes was even stronger, with more than a 16 percent increase over all durations for files uploaded. Thus, in July, CAFPI clients were able to borrow at an average of 1.48% over 15 years versus 1.29% last month (+19 percent); 1.58% over 20 years vs. 1.42% last month (+16pc) and 1.75% over 25 years vs. 1.57% last month (+18pc).

According to the rates currently offered by bank partners in certain CAFPI regions, the best profiles can get very attractive rates, still less than 2% (excluding insurance). Thus, for very good profiles (large contribution and high income), the rates posted by their banking partners are 1.30% over 15 years versus 0.90% last month (+40 percent); 1.45% over 20 years vs. 1.10% over 20 years last month (+35pc) and 1.55% over 25 years vs. 1.30% over 25 years (+25pc).

Average Fixed Market Rates for Home Loans – Data updated as of 07/29/2022
credit terms maximum rate average prices lowest rate.
7 years 1.66% 1.46% 1.36%
10 years 1.71% 1.61% 1.36%
15 years 2.26% 1.96% 1.56%
20 years 2.66% 2.01% 1.86%
25 years 2.76% 2.11% 1.96%
update in 07/29/2022

. Prices do not include compulsory and optional insurance. Average market rates (with a contribution of 20%), calculated on data from mortgage brokers. Indicative data only.

Expect a fall in home prices

Real estate prices are declining. This has not yet appeared in the published indications, since the effect of the delay is up to several months. However, many professionals assert that buyers who are able to obtain financing now are the ones to rule. Sellers are forced to lower their prices, and selling times are increasing. But prices have not fallen sharply yet. A decrease in real estate prices of about 10% to 15% would be healthy, and the real estate bubble should weaken.

The collapse in credit applications

All credit indicators are in red: Rates continue to rise rapidly and the volume of loans granted is down (-12.5% ​​in the second quarter YoY), according to the latest figures from Crédit Logement. The latter also expects a 15% drop in 2022 in credit production (accepted offers). On the ground, we are witnessing a gradual freeze of mortgage loans. Since the beginning of the month, 1 out of 2 coils are experiencing difficulties due to the wear rate! This is 2.57% for loans of 20 years or more, but it must be remembered that it includes the costs of obtaining collateral, administrative costs and the cost of borrowing insurance. Many banking networks have openly put themselves on the sidelines rather than lending at a loss.

📧 Get every day, from 9 am, the information that matters to your savings

Email savings news, new offers, new savings investments daily, changes in interest rates, new installments, key dates not to be missed…tax and real estate news.

No ads, no spam, no use of your email address other than this daily email being sent to you. You can unsubscribe directly to each email via the link at the bottom of the email page.

Leave a Comment

Your email address will not be published. Required fields are marked *