Do you have a real estate project in progress or planned in the medium term? The financial part is essential in your file. Knowing your borrowing capacity and the amount of monthly payments you can bear, including notary fees and state aid such as zero-rate loans, are essential steps to take. To make your job easier, Crédit Agricole offers a personalized, online mortgage loan simulation.
How is the cost of credit calculated?
The interest rate, a major factor in the cost of credit
When you sign a loan file with your bank, it mentions, among other things, the interest rate to which your loan is subject. This is the element that has the most impact on the price of credit. It is a percentage that makes it possible to calculate, on the one hand, the cost of credit for the borrower, and on the other, the profitability for the lender.
Financial institutions are free to set the rates they wish. However, the interest rate is negotiable, variable depending on the bank, and often depends on several factors:
• the repayment period: the longer this period, the higher the rate, because the bank takes more risks;
• your borrower profile: amount of contributions, financial and professional situations, etc. also influence risk-taking on the part of the bank and therefore the interest rate;
• the general economic situation and the market: the European Central Bank and the Bank of France influence the setting of rates, as does competition between institutions. A bank has every advantage in offering you a rate in line with the rest of the market if it wants to avoid seeing you go to another organization.
Your mortgage entails other costs
Beyond the interest rate, a mortgage involves other ancillary costs that you must take into account.
The cost of borrower insurance is not to be overlooked. It covers you in the event of default in repayment of monthly payments. It protects you and your loved ones in the event of death, disability, illness resulting in job loss, incapacity for work, etc.
The guarantee fees cover more the lender and the cases that the borrower insurance would not cover. Bank guarantee or mortgage, are all additional costs that are added to the credit.
Finally, the administrative fees, required by the bank, must be taken into account in calculating the cost of the loan, even if they are insignificant.
Good to know: a distinction is made between the nominal rate of the APR (annual percentage rate of charge). The nominal rate is simply the fixed interest rate applied by the bank. The APR takes into account the ancillary costs which inflate the borrowed capital and your monthly payments (administration costs, borrower insurance, guarantee costs, etc.).
The mortgage loan simulation, the tool to see more clearly
Calculating the total cost of a mortgage is tedious and difficult to do yourself. This is why Crédit Agricole has developed tools for mortgage simulation.
Our goal is to help you answer all financial questions related to your project, and to allow you to have a detailed view of all the elements that make up your future banking file:
– determine your borrowing capacity and therefore your acquisition capacity;
– estimate your interest rate;
– simulate the amount of your monthly payments;
– calculate your notary fees;
– check your eligibility for the zero rate loan.
The advantage of this tool is that it is free and thathe offers you an immediate and personalized response (depending on your personal situation, your contributions, the desired monthly payments, etc.).
Much more than an online calculator, this mortgage simulation gives you access to a personal space. Thus, in one click, you can transform your loan simulation into a loan request, then your space makes your life easier to follow the progress of your file, have access to the complete list of supporting documents, etc.
–
