Real estate credit: interest rates are now close to the historic low

French banks sharply lowered mortgage interest rates in April, their level now close to historic low, shows monthly study released Monday.

Never before has access to real estate loans been made easier by banking establishments, summarized in a press release by the Best Housing-CSA observatory. The first organization brings together the main French banks, the second is a market research institute.

All durations combined, competitive mortgage interest rates averaged 1.35% in April from 1.39% the previous month. “Real estate credit rates are therefore still falling and they have almost reached their historic minimum in November 2016, at 1.33%, the observatory points out.

1.49% on average for credit over 25 years

In detail, the 15-year loans were negotiated at 1.09% in April according to this observatory, the 20-year loans at 1.27% and the credits on 25 years at 1.49%.

In addition, since the time of previous records in 2016, inflation has accelerated in France – prices were up 1.2% in April on an, which theoretically means that one can almost gain purchasing power by borrowing. However, the observatory’s figures are gross and do not include, for example, loan insurance, systematically requested by the creditor

An average loan of 20 years and 3 months to buy in the old

loan

The particularly low level of rates is compounded by the historically long repayment periods granted by banks. The average delay, about two and a half years higher than it was in 2014, nonetheless marks a slight decline in April as already the previous month: loan durations fell to 227 months (18 years and 11 months) compared to 228 in March. Precision: this average includes several types of real estate loans. For new home loans the average duration is 248 months (20 years and 8 months), and it increases to 243 months (20 years and 3 months) for home loans. accession financing a purchase in the old.

Real estate credit entered a historic situation in several respects in France last year. Its total outstandings have notably reached an unprecedented level of more than 1,000 billion dollars, according to data from the Best Bank.

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