Real estate loan: recovery prospects – Pretto

After a sharp rise since the beginning of the year, rates remain on an upward trend in September 2022, but at a less sustainable pace. In an economic context that still does not lead to a clear recovery, credit institutions provide flexibility and predictability to enable borrowers to realize their projects. Encouraging signs on the credit front for borrowers who are still legitimately concerned about their ability to get financing.

Since the beginning of the year, real estate prices continue to increase and the trend will not change in September 2022 In September, rate hikes appear to be less permanent, indicating the first prospects of recovery for the next few months. This limited rate hike seen in September continues to occur in an uncertain economic and geopolitical context, particularly in high inflation.

Beyond the current context, an increase in real estate rates is seen in September is also explained by regional banks catching up, which continued to achieve competitive rates even as average rates rose. In September, most of the players in the banking sector communicated stable or slightly increasing rate scalesheralding a slightly better future for the most dreaded borrowers.

Duration Best rates Regular rates Tendency
10 years 3.52% 4.02%
15 years 3.96% 4.38%
20 years 4.08% 4.55%
25 years 4.28% 4.63%

Banks in battle to finance more real estate projects

The jaw effect caused by the increase in rates on one side and levels wear rateon the other hand, excludes certain profiles from real estate loans in 2022 and therefore access to property. This is especially true for first-time buyers and the poorest households. However, The French continued to invest in real estate, still considered a safe haven by borrowers. ” Many sets are still financed on exceptional terms because they are carried out at a much lower rate than inflation, i.e. at a negative real rate. », notes Pierre Chapon, President of Pretto.

In September, despite the continued rise in rates, the banks were already in battle order and did not hesitate demonstrate the flexibility to enable households to find viable financing for their real estate project.

Better, Banks seem to be anticipating a future interest rate hike on October 1, 2022 and adapt your strategy:

  • offer variable or mixed rates;
  • modulating their IT tools so as not to block slightly usurious files, which will no longer exist after the increase planned for October 1;
  • in some cases they also try to offer lower rates.

This adaptability on the part of banks it allows future borrowers to plan more confidently for the coming months.

New solutions offered by banks

To prove this spirit of conquest on the part of credit institutions, banks are turning new financing solutions : one of them is resumption of capped rate loansdynamically rated ” very positive » Pierre Chapon, President of Pretto. When signing the loan offer, the bank offers the borrower a very attractive rate, and this rate will likely be adjusted upwards or downwards during the contract, depending on the development of real estate rates. However, a loan with an adjustable rate cap promises real security given that it limits the increase in the property rate due to the “ceiling” specified in the loan agreement.

Faced with a less favorable economic situation compared to previous years and a financial market that has become more complicated, these better supported borrowers who can hope to take a property loan with a more favorable rate ! It is therefore advisable to seek the services of a real estate agent. He will use his expertise in this sector to help future borrowers find the most suitable real estate loan for their project.

While the context remains rather uncertain, most borrowers remain legitimately concerned about their borrowing capacity to realize their real estate project. It is all the more important to draw attention first to these ” There are encouraging signs on the credit front ” concludes Pierre Chapon.

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