Mortgage loan: it fell below 1.40% on average.
The average mortgage rate had not been as low since the end of 2016 : it stood at 1.42% in the first quarter of 2019 according to the Housing Credit Observatory / CSA. It was even 1.39% in March, a drop of 0.5 points compared to the previous month! The period is more favorable than ever for borrowers, despite a repayment duration that exceeds 19 years on average.
A dive in March
Since the 1.35% at the end of 2016, we had not plunged back below the 1.40% in terms of mortgage loan rates. It was therefore necessary to wait until March 2019 – more than two years – to cross this threshold again and switch to levels “really” historically low with 1.39%. In the 1st quarter, this therefore represents an average of 1.42% (-0.02 point compared to the end of 2018).
Staying in March, the average is now 1.15% for a mortgage rate over 15 years, 1.32% over 20 years and 1.55% over 25 years (-0.09 points on average compared to end of 2018). By going into more detail, the profiles most preferred by lending institutions can benefit from 0.86% over 15 years, 1.04% over 20 years and 1.29% over 25 years, while borrowers with the more risks have to settle for 1.43%, 1.60% and 1.80% respectively.
Over 19 years on average for a real estate loan
All the curves cannot be downward: if mortgage rates fell in the first quarter of 2019, that of loan durations increased. We now exceed 19 years on average (229 months, +3 in a quarter). The consequence of both the tension on the purchasing power of the French and the continuous rise in property prices, another curve that does not go down!
Since the start of 2014, the duration of mortgage loans has increased by 29 months, including 13 in 2018 alone. As a result, the proportion of mortgage loans signed over 25 to 30 years has become strongly in the majority (41.2% in March), ahead of the 20/25 age group (29.9%). Still a leader in 2014, the 15/20 year tranche now represents only 19.2% of funding.
More than four years of income to repay your loan
Between a lower cost of credit but longer durations, the relative cost of a property purchase now represents 4.3 years of income for households in the first quarter of 2019, against 4.1 a year before. It is the highest level ever observed.