2023-08-30 06:30:57
The real estate market is experiencing major changes in terms of interest rates for loans. According to new data from Official newspaperusury rates for September will reach 4.23% for loans under 10 years, 5.28% for loans between 10 and 20 years and 5.56% for loans over 20 years and over. These rates greatly exceed the figures recorded in recent years. For example, some banks are offering real estate rates at 5% on 25-year loans, a level that had not been reached for 15 years. The tightening of credit conditions does not only have an effect on interest rates. It also has a significant impact on the borrowing capacity of households. Industry professionals, including the broker Vousfinancer, predict that the cap rate might climb to 6% by the end of the year.
Towards real estate rates as high as in 2008
If a household might borrow 300,000 euros two years ago, this amount would be reduced to 200,000 euros with the introduction of rates at 5%. Banks are also more demanding in terms of personal contribution, requiring on average a contribution of 20% according to finance you. Beyond interest rates, other criteria are increasingly coming into play in the granting of mortgages. In particular, the energy performance diagnosis (EPD) is gaining in importance. Some banks are now more selective and require an additional down payment for homes with poor energy ratings, especially if they are intended for rental.
Granting criteria in constant evolution
The European Central Bank (ECB) began raising interest rates more than a year ago. This summer, faced with the persistence of inflation, it opted for a new monetary tightening. The decision forced the Banque de France to switch from a quarterly adjustment of the attrition rate to a monthly adjustment, a measure that will be in place until early 2024. The rapidity of the rise is striking. At the end of 2022, the rate was barely above 3%. However, it crossed the 5% threshold at the beginning of the summer.
1693377229
#higher #real #estate #rates
