Real Estate Loans Drop to 3.9%: Good News for Borrowers

The levels of estate loans finally back! On average, at twenty years, they are at 3.9% at the beginning of April, according to the broker Meilleurtaux, compared to 4.35% in November 2023, at the peak of the phenomenon. “The decline observed since the beginning of the year has been confirmed, with scales down 0.15 points on average compared to March, according to the profiles and the times,” said Maël Bernier, spokesman for Meilleurtaux. This is a real breath of fresh air for borrowers: they will save 11,104 euros on the total cost of a loan of 200,000 euros over twenty years, without insurance, compared to November.

This is not the only good news: competition is now in full force, while some networks were not lending last year. They are all back on the market due to the decline in the French government bond – the outstanding obligation of the Department of Treasury (OAT) – at ten years, the reference point used to set the cost of credit. The OAT has remained below the 3% level since the beginning of the year, compared to 3.5% in the fall, encouraging them to relaunch this activity under good conditions. “It takes between 1 point and 1.5 points of difference between the ten-year OAT and the real estate loan rate for the bank to generate a margin,” reveals Cécile Roquelaure, director of research at Empruntis.

Young couples with promising careers

The ball is now in the court of creditors. “For customers located in their main target, some centers are ready to offer discounts of around 0.2 to 0.4% compared to the scale presented,” said Sandrine Allonier, a speak for Vousfinancer. So couples of first-time buyers have the cards at the beginning of promising careers or even liberal professions to get a discount.

The market is finally coming out of its torpor. The time has come: the production of housing credit for individuals, without renegotiation, is limited to 118 billion euros over one year at the end of February 2024, according to the Banque de France, compared to more than 200 billion euros in 2021 and 2022 “It is a good time to buy, because, since the real estate market is calm, buyers can negotiate not only on the price of the property but also on the credit level,” said Sandrine Allonier.

The decline should continue

Another new feature is that first-time buyers with no down payment can now access finance, but found the door closed last year. “It is possible in the areas, in regions where real estate prices have not increased in recent years, as the risk of falling prices is limited in this case,” explained Cécile Roquelaure, from Empruntis. loan, this is to avoid that if the property is resold very quickly, after separation or a professional move, the price does not cover the capital to be paid back if the market has declined.