Since last January, borrowers have faced a Big hike in interest rates. Not a month in 2022 without a rise in values, which also accelerated with A resounding return to inflation. Become It is very difficult to borrow To finance the purchase of a property, and while the summer postpones projects, what will happen at the beginning of the school year? Does the evolution of the monetary context allow us to hope for a brake or even a cut in interest rates for September?
More rate hikes in August 2022
glass Mortgage interest rates Like the temperatures in France: to rise ! At the beginning of August, brokers reported significant progress ranging from From 0.10% to 0.35% depending on the term of the loan. Thus, in terms of weather, prices do not calm down, the upward movement has continued unabated since last February.
At six months, average values jumped from More than 80 basis points. Whereas it was common to go into debt over a classic 20-year period of less than 1% in December 2021 (excluding Home loan insurance cost and warranty cost), now average at 1.85%The best files can always have a 1.45% average on this maturity.
In August, it will be difficultborrow less than 2% In the longer term, i.e. 25 years according to the grant rules set by the financial authorities. Over the shortest terms (7 and 10 years), it is almost It is impossible to get a rate of less than 1%even with a distinct profile (high income, personal contribution More than 20%, residual savings, debt ratio less than 30%).
Accessing Mortgage Credit: Difficult in 2022
To use the climate metaphor, drought is raging all over France as the mortgage market is drying up. The credit tap is closed As the weeks go by and the price slider is pushed up.
With an aggregate rate exceeding 2%, how to borrow when the interest rate is set 2.57% for loans of 20 years or more ? Margin is too small to be incorporated into April (global effective annual rate) every Other costs related to granting creditplus interest: application fee, collateral (mortgage, money-lender lien or escrow), Borrower insurance And any broker commission.
However, a rate of 2% or even 3% rate remains by itself attractive. Prior to 2016, credits were trading much higher without the market falling back. The reason for the market blockage It is not attributable to the rise, albeit brutal, in interest rates, but to the slight change observed in Corrosion rate 2022.
Error calculation method that is not out of date. As a reminder, in order to calculate the maximum rates that credit institutions must not exceed for the next quarter, the Bank of France sets average april March for each category of loans during the current quarter whether increase by a third.
Over the course of three months, wear a slackWhile interest rates are likely to rise or fall. no modification It is not legally possible and in the event of a significant rise in interest rates, loan applicants facescissors effect.
As a result, among the intermediaries we record up to 40% rejection Due to the APR which exceeds the wear during the relevant period. The The first casualty rate of wearing clothes in 2022 ? they 30-55 years old, who represent 51% of those excluded from mortgage loans. Can they hope to make their case in favor of a rate cut in the coming weeks?
Price cuts in September?
The interest rates offered by banks are related to the monetary context. An indicator that banks use to set interest rates for individuals has changed dramatically: 10 years OATwhich is the 10-year bond loan from which the French state borrows, strongly contracted, down from 2.395% in mid-June to 1.429% currently. During an upward period, interest rates followed suit. With such a very steep drop, we can expect a Borrowing rate adjustment ?
I’m not sure, because a file European Central Bank monetary policy (The European Central Bank) changed course to try to counteract accelerating inflation (6.1% in France and 8.9% in the eurozone over one year at the end of July). On July 21, a ECB rate hike Increasing the cost of money to banks. One of the main key prices, is refinancing ratefrom 0% to 0.50%, an increase passed on the rates granted to household and corporate borrowing.
Will be Utopia hope for a decline in borrowing rates In September, at best current situation To avoid a complete shutdown of access to housing credit. Bank margins on this product little or noBecause institutions cannot adjust their balances to match the peak of monetary developments…because of wear a glass roof. Some expect a stalemate in the situation for several years.
Unless no one usury reform That brokers and banks are crying out for,Get a mortgage will become Mirage For more families. Some brokers suggest taking borrower’s APR insurance to stay under wear. Radio silence from the financial authorities.
By asserting that we are “heading towards more normal financing conditions that will not prevent real estate from obtaining quality financing”, Bank of France Governor François Villeroy de Galau refuses to accept wear problem It deprives thousands of families of unstoppable influence to support them purchasing power : is being House owner With a fixed rate loan Much lower than inflation instead of being Tenant is subject to rent fluctuations.