Mortgage credit: rates have risen by 10% on average (i.e. 16 basis points) in a single month, the 2% threshold with insurance largely sunk


Mortgage well above 2%, with insurance

Nothing dramatic yet, but obviously it’s starting to do a lot. For more than 6 months now, average mortgage rates have been, for all durations combined, on the rise compared to last month. Rates have doubled in just 5 months. But the rise in rates is not over, far from it. This month the acceleration of the rise in rates is even stronger, with more than 16 hundredths of an increase over all durations for the files mounted. Thus, in July, CAFPI customers were able to borrow on average at 1.48% over 15 years against 1.29% last month (+ 19 hundredths); 1.58% over 20 years against 1.42% last month (+ 16 hundredths) and 1.75% over 25 years against 1.57% last month (+ 18 hundredths).

According to the rates currently displayed by banking partners in certain regions of CAFPI, the best profiles can obtain very attractive rates, still below 2% (excluding insurance). Thus, for very good profiles (significant contribution and high income), the rates posted by their banking partners are 1.30% over 15 years against 0.90% last month (+ 40 hundredths); 1.45% over 20 years against 1.10% over 20 years last month (+ 35 hundredths) and 1.55% over 25 years against 1.30% over 25 years (+ 25 hundredths).

Average fixed market rates for real estate loans – Data updated as of 07/29/2022
Credit terms Max rate Average rates Minimum rate.
7 years 1.66% 1.46% 1.36%
10 years 1.71% 1.61% 1.36%
15 years old 2.26% 1.96% 1.56%
20 years 2.66% 2.01% 1.86%
25 years 2.76% 2.11% 1.96%
Updated on 07/29/2022

. Rates excluding compulsory and optional insurance. Average market rates (with 20% contribution), calculated on statements from mortgage brokers. Indicative data only.

Expectation of falling house prices

Real estate prices are falling. This is not yet visible in the published indicators, because the lag effect is several months. However, many professionals confirm that buyers who are able to obtain financing now rule the roost. Sellers are forced to lower their prices, selling times are getting longer. But the prices are not yet falling sharply. A fall in real estate prices of around 10% to 15% would be healthy, the real estate bubble must weaken.

Collapse in credit applications

All the credit indicators are red: rates continue their rapid rise and the amount of loans granted is down (-12.5% ​​in the second quarter, year-on-year), according to the latest figures from Crédit Logement. The latter also forecasts a decline of 15% in 2022 for the production of credit (offers accepted). We observe on the ground a gradual freezing of mortgages. Since the beginning of the month, it is 1 out of 2 files that are experiencing difficulties because of the wear rate! This is 2.57% for loans with 20 years or more, but it should however be remembered that it includes the costs of taking out guarantees, the administrative costs and the cost of borrower’s insurance. Many banking networks have openly put themselves on the sidelines rather than lending at a loss.

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