The conditions for financing and refinancing the production of loans are indeed exceptional and the willingness of banks to support demand is intact, is one of the conclusions of the latest edition of the Housing Credit Observatory / CSA. The average rate of a home loan fell slightly in November compared to the previous month.
An average rate of 1.54% in the old
Admittedly, the average fixed rate in the old real estate is down in November compared to the previous month (1.54% in November, against 1.55% in October), but the movement remains broadly stable since April. ” Fluctuations, in the order of the base point from one month to the next, [express] more the distortion of the structure of production than a true evolution “. Note that the average rate in the new is, he, a little higher (1.60%).
Clearly, interest rates have not changed much since the spring, which we also see in our real estate rate analyzes. But that’s not bad news either. To the delight of real estate buyers, bank rates continue to remain at historically low levels, despite their rise at the beginning of the year (average rate of 1.31% in November 2016 according to the figures of Financing Company). And the banks are doing everything to support the demand.
There is one caveat: real estate prices. Unsurprisingly, their rapid rise has a direct impact on the solvency of demand.
The average cost of operations increases
Mechanically, with real estate price growth, the average cost of operations increases. This indicator had risen sharply in 2016 (+ 4.3%), it is tending to accelerate in 2017 (+ 5.6% over the first 11 months of 2017).
As a result, in November 2017, the average cost reached 4.1 years of revenue, ” a very high level since the end of summer 2016 “. Even if the increase in household income tends to accelerate, their growth remains, despite everything, half as fast as the cost of operations.
A loan term that is growing
If the average rate goes down slightly, the duration of borrowing follows, it, the opposite way. The real estate buyers who went through Financing Company in November borrowed for a longer period than October 2017: 219 months (a little over 18 years), against 217 a month earlier.
Since the end of 2016, the average loan term has been extended by 6 months. According to Financing Company, ” overall, the current credit conditions still support the realization of household real estate projects, the lengthening of the duration of the loans granted has contributed significantly, beyond the fluctuations observed a month on the other “.
Housing loan, kézako?
Credit Housing is a surety organization. In case of payment incidence on the part of the borrower, Financing Company takes over the repayment of the mortgage.
The deposit involves the payment of guarantee fees, consisting of:
- a commission ;
- participation in the Mutual Guarantee Fund. If no payment incident is observed during the repayment of the mortgage loan, the borrower is returned a portion of the participation in the guarantee fund.