Real Estate Credit: Borrowing at 1% is just a memory

“Get” a rate at zero point something… this is what, at the same time a year ago, was almost common for mortgage applicants.

In October 2021, the average 20-year mortgage rate was 0.99%, according to Observatory Credit Home / CSA. The best profiles – a quarter – even paid an average of 0.78% to the child (excluding insurance and miscellaneous costs).

Forget these numbers if you have a meeting with a banker or broker! They belong to the past. Just one year later, the 2% mark was crossed for the first time since 2016: the twenty-year average reached 2.06% in October (up 0.18 points) and 2.17% over the twenty-five years, the same source according to.

And November is already shaping up to be rising as well, according to scales sent by banks to brokers. Compared to the end of October, it increased by 0.2 points., says Ludovic Huzieux, co-founder of Artémis brokerage group. results: “Today the average over twenty years is about 2.4%”Broker Meilleurtaux spokesman Mael Bernier believes.

The growth is not over

At Empruntis, another broker, director of research, Cecile Roquelaure, averages 2.30%. “Which varies between 1.75% for the best profiles in the most successful banks – but this figure is rare – and 2.85% for a classic profile in an institution that does not currently have a strong willingness to lend.”.

Inflation obliges, so the era of very cheap mortgages is over. Although it may seem excessive to talk about an “era” for a period that will last, in the end, about five years, we have to admit that we are happy to get used to these miniature figures. And above all, get used to the fact that the growth, which began especially in March, is not over. Thus, the Housing Credit Observatory/CSA estimates that for all durations combined, the average rate will be 2.40% in late 2022 and reach 2.80% in mid-2023.

The impact, in euros? For the borrower, every tenth of the rate increases the cost of credit. According to a MeilleurTaux simulation based on a rate increase of 1.1 points from the beginning of 2022, the monthly payment for a loan of 200,000 euros over twenty years was 100 euros more expensive than it would have been under the agreement reached in October. It would be in January.

While the rise in lending rates is quite steep, credit remains historically cheap (we borrowed around 5% in 2008 and 9% in the early 1990s). And it remains much slower than inflation, recalls Jezebel Coupey-Soubeyran, a lecturer in economics at the University of Paris I, who invites us to calculate the real rate of credit, that is, minus the price increase. “If you borrow at 1.5% at the end of 2020, inflation at 0.5%, the real lending rate remains positive, it’s negative today for a loan at 2.50%, but with inflation it’s 7%.”He notes and concludes that“The loan is even cheaper than in the past years.” nothing in his eyes “Return the mortgage lending cycle, at least.”