This is a “rebound” which should not be overinterpreted: the average mortgage rate rose to 1.18% in September 2019 according to the Housing Credit Observatory / CSA. A level that remains very low and is coupled with a slight decline in the average duration (226 months).
1.18% over 18 years and 10 months on average
Those who see the glass half empty will find that the average rate has recovered 0.01 point at the start of the school year for a period which has decreased by two months (18 years and 10 months), which can be interpreted as a tightening of the conditions borrowing.
Optimists, those who prefer to look at the glass half full, will say more that property rates remain below inflation for the 16th consecutive month, which is unprecedented since the Liberation as explained by the Housing Credit Observatory / CSA. Recalling that it is the monetary policy of the Good Bank that offers these favorable conditions to borrowers, more than twice lower than those at the end of 2014 for the contraction of a home loan (2.38% at the time) .
The cost of credit from simple to double according to the borrower profile
In detail, the mortgage rate remains below 1% over 15 years (0.92%), below 1.10% over 20 years (1.08%) and slightly above 1.30% over 25 years (1.33%). According to the borrower profiles, the gaps are widening: the first group – the one that shows the most guarantees in the eyes of lending institutions – can borrow at 0.68% over 15 years, 0.83% over 20 years and 1, 08% over 25 years.
For the fourth group, which brings together borrowers with more uncertain solvency, it is 1.17% over 15 years, 1.36% over 20 years and 1.58% over 25 years. For a sum of $ 150,000, the loan cost differential is $ 5,760 over 15 years , $ 8,400 over 20 years and $ 10,500 over 25 years, according to a monthly calculation with our free dedicated calculator.
Credit market in full swing
The drop in the average duration of mortgage loans can be seen in the share of borrowings under 20 years, slightly up on the 2nd quarter of 2019 (+2.6 points), while those over 20 to 25 years fell below 30%. (29.5%), and those between 25 and 30 years old under 40% (38.1%).
In terms of activity in the mortgage market, production rebounded in September according to the Housing Credit Observatory / CSA, thanks in particular to purchases in the former. The number of loans granted increased by 8.1% between June and September 2019 compared to the same period a year earlier (+ 7.6% in terms of production amount).