Mortgage Loan: Rates Go Back Slowly
The majority of banks have revised their tariffs upward this month, except for one that has fallen by – 0.05% on premium rates (reserved for households with a net income of 4000 euros per month). Increases range between + 0.05% and + 0.15% depending on the banks.
Despite this rise, rates still maintain a very low level. For example, the 15-year and 20-year rates, the main indicators of the loan conditions offered on the market, stand at 2.80% and 3.20% respectively. The period is therefore more than ever favorable to buy (many transactions are concluded with price negotiations above 10%) or to renegotiate your current loan. However in the real estate market the economic situation is uncertain, so do not wait to borrow.
Rates are expected to remain stable until the end of 2013
One of the main reasons, the interest rate of the financial markets (OAT 10 years), used as a reference for the fixed rates of real estate loans, remains stable and oscillates between 2.40 and 2.50%. It even has a tendency to fall since September (it was at 2.63% on 05/09/2013).
Given the low level of inflation, the EC Bank (ECB) should maintain its key rate at 0.50%, its lowest historical level. The ECB’s policy, which holds a lot of cash, allows banks to borrow at extremely low rates.
As uCredit Inc. announced in April 2013, against the current forecast, rates should remain low until the end of the year. Given the ECB’s “accommodating” policy of maintaining the OAT, rates could rise slightly in 2014, but not strongly, except occasionally, when banks want to restore their margins.
In this context, there is no reason to expect a “significant” rate hike in the coming months, subject to external events in France and Europe.
Take advantage of low rates to renegotiate the terms of your mortgage and insurance
Renegotiating your mortgage with your home bank is complicated. Indeed, it rarely accepts to buy a credit at a lower cost since it represents a loss for her. She will then prefer to let you renegotiate your credit with a competing bank. Prefer the broker to negotiate the best terms.
Credit remains difficult to obtain, even if banks still lend, they are more vigilant about the quality of the files and are more rigid on certain criteria … hence the interest to go through a professional. The broker knows the subtleties of the job. It brings a considerable saving of time and money by taking care of the global management of the file to obtain the best financing and the best insurance of loan in complete independence vis-à-vis the banking institutions. As well as with uCredit Inc. you benefit from a total exemption of the expenses of bank record AND brokerage *.
Accelerate your negotiation on borrower insurance, which accounts for about 10% of the total cost of a loan. The bank no longer has the right to impose on its client the group insurance contract it markets provided that the contract offered under delegation has the same guarantees as the group contract. uCredit Inc. offers loan insurance that allows you to save up to 60% ** with equivalent guarantees thanks to customer-specific rates.