Increase in Credit Rates and the Stabilization of Borrowing Rates

After interrupted increases since the summer of 2022, the European Central Bank (ECB) declared at the end of October that it would not change its key rates and in particular its main bank refinancing rate, stabilized at 4.50%.

This is not a surprise, since this break had been announced. It will allow borrowers to regain some purchasing power and obtain financing to which they would not have had access a few weeks earlier.

The 4% mark crossed sustainably

The rate of increase in credit rates has continued since September, but slowed down in October. However, rates are now firmly above 4%.

The loan broker Cafpi reports an average rate of 4.01% over 15 years (compared to 3.91% in September, i.e. + 0.10 point), at 4.17% over 20 years (compared to 4.05 %; + 0.12 points), and at 4.31% over 25 years (compared to 4.17%; + 0.14%). While the increases have been hovering around +0.20 points for several months.

Loan broker Pretto cites similar rates for October at 3.96% over 15 years, 4.13% over 20 years and 4.27% over 25 years.

According to the Crédit Logement/CSA Observatory, for 25-year loans granted in October, rates exceeded 4.25% for three-quarters of borrowers and half of borrowers for 20-year loans. Thus, the profitability of new loans for banks has been increasing since last June.

A wear rate close to 6% for November: unheard of since 2009

The new usury rates were published in the Official Journal on October 27. It is set, for loans over 20 years or more, at 5.91% for November. Unheard of since 2009, according to Cafpi. In recent months, the increase in usury rates followed a pace of +0.20 points on average every month.

For November, this smaller increase, of +0.11 points compared to October, is explained by the slowdown in the rise in interest rates. “With rates around 4%, negotiable borrower insurance at very attractive rates and a usury rate close to 6%, the conditions are once again conducive to financing real estate projects,” says Capfi.

Towards more stable credit rates

“The decision taken by the ECB to keep its key rates unchanged will make it possible to continue this movement of slowdown, or even stabilization of borrowing rates at a plateau,” underlines Cafpi.

Another indicator of the improvement taking place in the real estate financing market is that of banking deadlines, according to him. In October, banks took an average of 14 days to present a commercial proposal to their clients. This is the shortest period observed since the creation of its indicator in November 2021, “proof of new dynamism in the credit market. »