2023-12-29 05:36:00
While the mortgage loan market is in sharp decline in 2023, following the rise in rates, the drop recorded for a little over a month is giving the market a boost. And, above all, does the business of prospective buyers. Between November 3 and December 27, rates rose from 3.88% to 3.31% for a 25-year fixed-rate loan, according to the Immotheker/Finotheker barometer. Concretely, for a loan of €300,000, the monthly payment goes from €1,552 to €1,463, i.e. a monthly saving of €89 and, over the total duration of the loan, a saving of €26,694.
Borrowers who have had to extend the duration of their credit or revise their ambitions downwards in recent months are therefore finding greater borrowing capacity. Thus, for a monthly payment of €1,460, the amount borrowed amounts to €300,000 whereas for this same monthly payment, the capital borrowed was limited to €282,000 on November 3. The buyer therefore recovers 6% of borrowing capacity, which is not negligible.
We also see that the rate gap between 20-year and 25-year loans is narrowing. For loans over 25 years, the rate is 3.31% while the rate for loans over 20 years is 3.29%. The 25-year formula saw its rate drop more sharply (-0.57%) than the 20-year formula (-0.44%). And it is also good news for first-time buyers because, combined with the fall in property prices, this drop in rates once once more makes the market more accessible. However, the personal contribution (10% of the value of the property, registration fees and purchase costs) remains a barrier for those who do not have a small nest egg or the financial support of relatives.
Revolution on the Brussels real estate market: tenants will be able to exercise a right of preference to buy back their apartment
However, let’s stay in the good news section since the application fees for mortgage loans will drop from €500 to €350 from January 1st. Some banks have already anticipated this reduction and are offering fees of €350. The Price Observatory has, in fact, shown that between 2014 and 2018, credit institutions increased the price of subscribing to a property loan by around 50% on average, going from 320 to 479 euros, without clear justification. Subsequently, the application fees increased further to reach the legal maximum of 500 euros. “Fees that are far too high,” noted the Minister of the Economy, Pierre-Yves Dermagne (PS), to the extent that “they make access to property more difficult. In addition, their lump sum nature further penalizes small amount credits,” he underlined.
As for those who plan to buy a home in order to demolish it and rebuild it, they will be able to benefit from a reduced VAT rate of 6%. The measure had already been in effect since January 1, 2021, but it was only provisional. The government has now definitively implemented this reduction in VAT, but it will only apply to the purchase of a home privately. Large housing projects with demolition-reconstruction will no longer be able to benefit from reduced VAT. A decision that the construction confederation regrets, considering that it is a missed opportunity to resolve the housing crisis and improve the energy performance of particularly dilapidated buildings, especially in Brussels.
Properties with a better PEB turn out to be more expensive on the market
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