Fixed.  Credit rate: the rise is accelerating

Fixed. Credit rate: the rise is accelerating

Unsurprisingly, lending rates continued to rise in the 2e quarter of 2022, while remaining well below inflation.

To compensate for this increase, housing loan terms are maintained at levels not seen in the past.

Fast progress in four months

in 2e Quarter 2022, all terms combined, the average mortgage rate is 1.40% (excluding insurance), compared to 1.12% in 1.Verse Quarter of 2022, according to the Housing Credit Monitor/CSA.

In June 2022, the average rate was 1.52%, compared to 1.05% in June 2021.

“After a very moderate increase of 4 basis points during the first two months of 2022, progress has been the fastest since: +42 basis points over four months, in response to the heightened tensions in all financial markets. Since the outbreak of the war in Ukraine”, confirms the observatory.

Rates that are still well below the level of inflation

In June 2022, the average credit rating was 1.36% over 15 years, 1.49% over 20 years, and 1.59% over 25 years. While INSEE estimates an inflation rate of 5.8% over one year in June.

“All borrowers are benefiting from loans at rates much lower than inflation, something not seen since the end of the 1950s: the real interest rate on mortgages is largely negative, at a level not seen since 1949,” notes the Housing Credit Monitor/ CSA.

Credit terms that go on

in 2e Quarter 2022, average term of loans granted is 239 months.

“Since the end of the summer of 2021, the average term of loans granted has remained at unprecedented levels: this term was 13.6 years in 2001 (163 months), and it was set at 20 years in June 2022 (240 months),” he notes. observatory. An increase that makes it possible to mitigate the increase in credit rates, real estate prices and the level of personal contribution required by banks.

in 2e In the 2022 quarter, 65% of homeownership bank loans were granted for a period of more than 20 to 25 years, “a percentage not seen in the past.”

market downturn

As a result of high interest rates, the war in Ukraine, and even the deterioration of the purchasing power of households, the number of loans granted decreased by 7.3% in 1Verse Half of 2022 compared to 1Verse Half 2021 and 9% in 2e Quarter 2022 compared to the second quartere Quarter 2021.

What is the expected rate for the end of the year?

With inflation accelerating and uncertainty rising, mortgage rates will continue to rise in the coming months.

According to the Crédit Logement/CSA observatory, “According to the June scenario, the rate for 2022 will now be 1.55%, with 1.90% at the end of 2022. But with the potential for a shock to energy supply increasing significantly, the loan rate is likely to stand at 2.25% in end of 2022, with an average annual level of 1.60%.”

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