Rates continue to fall! In February, the average rate on mortgages offered by banks to individuals fell further to 2.21% excluding insurance, compared with 2.29% in January. 2015 looks set to be a year of opportunities for borrowers!
The Crédit Logement - CSA observatory shows that the average rate for loans in the competitive sector is 2.26% for new-build property and 2.19% for existing property.
This trend is similar for old, new and renovation properties.
By way of comparison, average rates are currently
- 2.19% for existing properties, compared with 3.12% in December 2013;
- 2.23% for new-build properties, compared with 3.08% in December 2013;
- 2.23% for works, compared with 3.12% in December 2013.
Given these advantageous percentages, borrowers are moving away from variable-rate loans. Even though the proportion of variable-rate loans has been at its lowest level since the 2000s, at 2.1%, there is no longer any point in using them.
There are several reasons for this fall in rates
Bond rates are currently insignificant, particularly following the ECB's public debt buyback programme, and this is enabling banks to maintain comfortable margins, despite the very low interest rates on loans to individuals.
In addition, there is strong competition between banks to win new customers. Because of the very low interest rates, the banks are aware that these new customers will remain loyal. In fact, changing banks during the course of a loan means buying back the loan with a renegotiation of the rate of at least 0.8%, which seems difficult to envisage given the current offers.
Also in February 2015, the average loan term increased again, to 208 months.
