Real estate loan rates have been falling since the start of 2024. A decline that is limited for the moment, but which allows households who want to invest in real estate to begin to hope.
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The average rate, excluding insurance, which was still 4.24% in December 2023, now stands at 4.15% in April 2024, according to the Housing Credit Observatory (CSA). Some brokers even manage to get 3.4% over 20 years, which they of course sell a little more expensively to clients, but the decline has well and truly begun. This comes after two years of strong growth. And there is no reason for it to stop there.
We owe this rate cut to the decline in inflation. Price increases are slowing down across Europe. In October 2022, inflation in the euro zone was more than 10%. Today we have fallen back to 2.4% in France. In Germany, inflation is 2.2%, the lowest in three years and, above all, very close to the objective set by the European Central Bank. In this context, the ECB – from which commercial banks borrow to then redistribute credit to individuals – will be able to start lowering its rates. The month of June is mentioned. This would be a real signal which would be reflected in mortgage rates.
Time to invest?
No rush, but you should know that, when a mortgage rate drops, you gain on both the amount of credit and loan interest. The right question is not whether now is the time to buy, but rather whether we can move on from “I want to buy” At “I can buy”.
Lower rates, in a way, make buyers richer. For example, if you set with your banker a monthly repayment of 1,000 euros per month over twenty years, with rates of 4.5%, the bank will lend you around 145,000 euros. For the same monthly payment of 1,000 euros over twenty years, but with a rate that has fallen by half, the bank will lend you 190,000 euros. You will therefore have gained 45,000 euros in the process. An additional nest egg that can trigger the decision to invest. This is anticipated, and the period we are experiencing today is perhaps the time to think about it, without rushing.