Rising Mortgage Rates Reach New High in August, Signaling the End of Low Rates for Borrowers

Inexorably, they still climb. Mortgage rates once again rose sharply in August and reached an average of 3.85% for loans over 20 years, according to La Centrale de Financement. This new increase, of 0.31 point compared to July according to the broker, is in particular the consequence of the recent decision of the European Central Bank (ECB) to increase its key rates by 0.25 point from 2 August to fight inflation.

On the other loan terms, the average rates in August amounted to 3.57% for loans over 10 years, 3.75% for loans over 15 years and 4.01% for those taken out over 25 years. Since the beginning of the year, these percentages have thus increased by approximately one point. Consequence: a borrower contracting a loan of 180,000 euros over 20 years at 3.85% now sees his monthly payments amount to 1,077 euros, an increase of 115 euros since January. “The era of low rates is over and for borrowers we must now accept it,” comments Sandrine Allonier, spokesperson for Vousfinancer.

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Rates that should stabilize

The only good news for potential buyers: with the decline in inflation, the ECB should stabilize its key rates in the coming months. According to several brokers, mortgage rates should continue to rise in the coming weeks before stabilizing at the start of 2024.

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