French banks dominate those of European neighbors on the mortgage issue. The latest figures from the Astro bank confirm a trend that has been emerging for several months already. Strong and very up to date on the issue of risk management, French establishments are able to offer ever lower mortgage loan rates. It remains to be seen whether it will last?
The never-ending fall in mortgage rates
Average home loan rates continue to drop month after month. They were divided by three on average between 2012 and 2019. The cost of a loan of $ 250,000 over 15 years was reduced by $ 39,100 on average between 2013 and 2019.
The average rate of new home loans stood at 1.13% in October 2019. It even fell below 1% (0.90%) on 15-year loans. The average duration is relatively stable, namely 229 months according to the latest figures (19 years). The mortgage loan over 20 years is the most requested.
French banks rule Europe
The constant fall in mortgage rates is explained by the excellent health of the major French banks. Among their great advantages, we can cite:
- An irreproachable risk calculation system
- Fixed rates in 99% of cases
- Reliable and reassuring guarantee methods (borrower insurance and surety)
This solid base allows French banks to dominate those of European neighbors. The growth rate of home loans stood at 5.80% in France at the end of September, against 3.60% on the European level.
France is closely followed by Germany, while Italy and Spain, two countries where the economy is more unstable, are lagging behind.
Will it last?
The rates are reaching extremely low levels and will therefore naturally not fall indefinitely. Commercial banks, on the other hand, borrow at ever lower key AB-directed policy rates.
They are even negative in some, the AB wanting institutions to lend their liquidity to individuals and businesses rather than leaving them “warm”. We can therefore count on a further downward trend for the year 2020 to come.
Our real estate comparison makes it possible to carry out a simulation and obtain feedback from the best intermediaries able to find the lowest rates.