Preferred rates for first-time buyers
Bank rates (excluding insurance) continued to fall overall in June, to be followed in the coming months with the evolution of ECB rates. Mortgage loan applicants must still comply with the rules imposed by the High Council for Financial Stability, not exceed a debt ratio of 35% (including insurance) and a maximum term of 25 years (27 years for new builds).
In June, rates continued to fall in most banks, which sent scales down by 0.05 to 0.30 points ! In addition, many companies also offer loans at subsidized rates, with rates ranging from 0 to 3%, in order to help first-time buyers finance their project. In certain situations, these aids can be combined and lead to a significant reduction in the total cost of credit, thus allowing some borrowers to borrow at rates equivalent to those of 2 years ago!
In June, credit rates are decreasing in anticipation of the ECB rate cut.
In June, most of the scales received were still oriented downwards, by 0.05 points to 0.30 points. On average, the decrease observed is 0.10 points. These are mainly movements affecting regional banks, but also a national bank ! In addition, some banks are also granting discounts on the rates displayed, up to 0.4 points, depending on the energy performance of the property, the age of the borrowers or the level of contribution or income, i.e. depending on their appetite to finance this type of customer.
Before the end of the summer, banks want to offer attractive offers in order to attract new customers in a booming market, without being very dynamic.… These new rate cuts, probably also linked to the anticipation of the rate cut by the European Central Bank on June 6, are good news for those who have a real estate project and can now borrow, with a good file, at rates close to 3.5%.
In this situation of gradual and continuous rate reduction, there should be no immediate additional effect on ECB rates. The latter should continue to decrease in the coming weeks, with a magnitude that will however vary depending on the number of successive rate cuts by the ECB as well as their magnitude, two elements on which we still have little visibility.
On average, it is currently possible to borrow at 3.55% over 15 years, 3.75% over 20 years and 3.95% over 25 years, but the lowest negotiated rates reach 3.3% over 15 years, 3.4% over 20 years and 3.6% over 25 years.
Low-rate loans, particularly for first-time buyers, make it possible to significantly reduce credit costs.
Even if the zero-rate loan is now refocused on new construction and no longer concerns individual house construction projects, some banks grant first-time buyers subsidized loans of up to €30,000, at rates of 0 to 3%, provided that the amount does not exceed 10% of the principal loan. These loans are most often reserved for first-time buyers, whether they are eligible for the PTZ (find our article on the PTZ HERE.) or not, or subject to the conditions of carrying out energy renovation work, or purchasing a high-performance property !
Banks aim to stand out from the competition, which is often very present in the regions, by offering loans at preferential rates, in order to recruit first-time buyers, customers with whom they can establish a long-term relationship. More and more loans are also preferentially based on the DPE (read our article on the DPE in 2024 HERE) of the property, which also allows them to find financing for more energy-efficient properties, which makes them more liquid or which will be in the future thanks to the completion of work. At a time when banks are once again actively seeking customers through mortgage loans, more and more of them are offering this type of loan, which can significantly reduce the total cost of credit for borrowers who take advantage of it.
In the current context, first-time buyers can sometimes forget that there are other subsidized loans granted by banks, aid from cities or the Action Logement loan, which are a real advantage for accessing property and reducing the cost of their credit. It is the role of brokers to tell them about this aid that can make a difference in their file.
DECORDIER immobilier agencies can help you with your real estate project:
- Thonon +33 (0) 4 50 72 31 95 / e-mail : thonon@decordier-immobilier.com
- Evian +33 (0) 4 50 75 15 15 / e-mail : evian@decordier-immobilier.com
- Grand-Baie : +230 268 2828 / e-mail : contact@decordier-immobilier.mu
www.decordier-immobilier.com