Real estate loans: how and when to renegotiate the rate?

The surprise dissolution of the National Assembly after the European elections on June 9 caused the 10-year OAT rate, which serves as a benchmark for real estate loans, to rise. However, following the European Central Bank’s June 6 announcement of a cut in its key rates, which rose from 4% to 3.75%, the reduction in mortgage rates that began at the end of 2023 is expected to continue. This move ends the status quo effective September 2023, after fourteen months of increases. This is good news for individuals planning to buy a property in the coming months.

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At the beginning of June, according to broker Meilleurtaux, banks were lending for twenty years at an average of 3.75%. “We expect average rates around 3.5%, probably in early fall”, says Maël Bernier, spokesman for Meilleurtaux. However, uncertainty about the results of the parliamentary elections does not protect against further increases in the OAT rate between now and the formation of a new government.

– still fragile – the easing of credit conditions leaves a bitter aftertaste for borrowers who bought at the end of 2023 when lending rates were at their highest. All is not lost for them. Soon it will be time to think about arranging a new loan. Given the costs involved, the operation only makes sense if the borrower can get an interest rate at least 100 basis points lower than his original loan.

Contact your bank

Those who took out a 4.4% loan at the end of 2023 must therefore aim for the new 3.4% rate to kick off, or even wait a few more months for the token 3% cap to rise gain. This is truly a personalized rate offered to the borrower, not the market average. However, the best files have already gained less than 3.50% over twenty years. ” It is necessary in addition, be in the first five or six years of repayment, during which the percentage of interest on the monthly payment is the highest”, says Pierre Chapon, co-founder of Pretto.

The easiest way to start is by contacting your bank and renegotiating the rate. Their reaction will depend on the history of the relationship and their desire to retain the client. It is likely that the newly proposed rate will not be as advantageous as the borrower could get at another establishment. “But it may make sense to accept because it avoids changing banks”notes Pierre Chapon.

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