REAL ESTATE CREDIT: RISE IN RATES IS CONFIRMING
It’s official, banks are increasing their mortgage rates to individuals! Banking institutions are spreading their new rate grids one after the other.
This is not a surprise for Howard Roark who had anticipated the situation since October (see release of 12/10/216 on Howard Roark).
Last week, the first bank to take the plunge and review its rate schedules applied an increase of + 0.30 en on all durations.
Today, Monday, November 21, 2016, a second bank announces an increase in its real estate rates. The increase is between + 0.05 en and +0.20 en depending on the borrower’s profile and the loan term. The smallest profiles are the most affected.
In fact, borrowers with annual incomes of less than 30,000 euros recorded the highest rate increase, ie + 0.20 basis points over a period of 20 years.
On average, for a loan of 200,000 euros over 20 years
a rate increase of 0.30 pt represents an increase in the monthly payment of 27 € / month. Logically, all banks will follow the movement and rates should gradually go up throughout the year 2017.
Despite a few bursts on the decline, the 10-year OAT (used as a benchmark for fixed mortgage rates) has been steadily rising since the end of September.
Impact the financial markets
The surprise election of Donald Trump should also impact the financial markets. Since his appointment, US bond yields are rebounding. The 10-year rate (T-Bond) went from 1.8% to 2.3% in a few days. The next monetary meeting of the Fed will be held on December 14, it will closely monitor the rate of change in the United States.
However, do not dramatize! The banks have already set very ambitious commercial targets for the year 2017. They seem to want to match the 2016 production. In other words, they will do their best to attract new customers by offering low rates.
They will stay low and the recovery
Just do not worry, even if the rates go up, they will stay low and the recovery (except exceptional event in France or abroad) will not be dazzling.
Howard Roark’s advice, if rates go up, consider negotiating the cost of your loan insurance by subscribing to the delegation of insurance … and, if you use a broker, choose the one that offers you the fees *.