Lately, we have counted the “news” indicating that mortgage interest rates are starting to rise.
The information is correct, but as far as our Purchasing Masters are concerned, this increase remains very modest. It is only since the end of April that the rates started to rise again. Compared to the start of the year, they increased from 0.1% to 0.15%. If you look in the rearview mirror, they were quite low in May 2019 (but still around 0.2% higher than today) and about the same as today in May 2020.
But it is true that a small change in the interest rate can make a significant difference at the portfolio level. For a loan of 175,000 € with a fixed interest rate over 20 years, an increase of 0.3% implies that you will have paid in the end some 5,500 to 6,000 € more.
The interest of bankers is not yours
Lenders are fond of information that encourages prospective buyers to make a purchase. For them, the mortgage loan is indeed the ideal way to bind a customer for a very long time. Because whoever takes out a loan often takes out home insurance and outstanding balance insurance with the same bank, opens a current account and a savings account.
But just because interest rates are low and likely to rise doesn’t mean you should buy now. The loan is one thing, the actual purchase is another. If interest rates continue to rise, it is likely that demand for real estate will decline and prices will rise less, stabilize, or even fall a little.
Our advice therefore remains: no rush. Take the time to properly assess the purchase of a property and the conditions of a loan, compare the different options and negotiate.
Our tools at your disposal
Our mortgage comparator helps you find the financial institution that offers the most advantageous loan. It is then up to you to use the results obtained as a basis for negotiation.
To the comparator
In addition, thanks to our mortgage loan calculator, you can determine the total cost of the loan (including ancillary products) or the maximum monthly payment that you can bear.
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