This summer, the bank advisers will have to make their appointments because the low rates of mortgages do not take leave. While the average rates have been kept at particularly low levels since 2016, the latest surveys of the Crédit Logement Observatory hit the nail on the mark: with an average of 1.29% currently, the record for low rates is reached for all borrowing terms combined. For households still hesitant to embark on an acquisition project, it is time to make this purchase a reality. Because even if the decline should remain effective at least until next year, we must not miss the attractive financing conditions.
All conditions are met to consider the purchase of real estate
For first-time buyers, that is to say those who are considering buying their first property, this is a real opportunity to finance their project without necessarily engaging on a very long term. Low rates and reduced monthly payments can even encourage tenants to look at real estate investment. Because, according to the profiles, it is possible to pay less a monthly payment than a rent. Moreover, in this case, the money is not paid out as it is capitalized in the property acquired. Once the loan has been repaid, the household is the sole owner of the property.
Real estate purchasing power up
Of course, even with low rates, banks still require certain criteria to access loans. The necessary guarantees remain to have a stable professional relationship with at least one permanent contract (contract of indefinite duration).
On another level, the dramatic fall in rates observed since 2016 allows the French to benefit from an increase in their real estate purchasing power, despite a rise in market prices. In the space of 10 years, buyers gained 36% of loan capital without increasing monthly payments. This therefore represents additional square meters in some tense market areas or even whole rooms in rural communes.
Finally, the dynamics of low rates is the ally of borrowers and they do not hesitate to seize this opportunity to increase the budget for the acquisition. Thus, on average, it now takes 4.4 years of income to buy a good while last year it was only 3.9 years of cumulated income to cover the operation. The French are therefore taking advantage of low rates to borrow more without digging their debt.