After having (re) fallen below 1.40% at the start of the year, the average mortgage rate has plunged below 1.30% in April to stand at only 1.29% according to the Observatory Housing Credit . It is simply the lowest level ever observed, even lower than that of November 2016 (1.33%). And yet, the duration of the loan started to rise again in parallel (19 years).
Under 1% over 20 years for the best records
We had never seen that. The breakthrough in mortgage rates below 1.40% in the fall of 2016 had already broken records, but the curve started again above 1.50% in 2017 and stabilized below this symbolic bar in 2018 But since the start of 2019, they have borrowed a slide again from 1.44% to 1.29% in four months. We even approach 1% on average over 15 years (1.02%), while real estate rates are fixed at 1.20% over 20 years and 1.42% over 25 years.
But a quarter of borrowers with the best records are entitled to conditions that leave one wondering: less than 1% on average over 15 and 20 years (0.79 and 0.97%), and a better rate of only 1.19% over 25 years . As for the least advantaged real estate purchase candidates, they still manage 1.28% over 15 years and 1.66% over 25 years.
Modest households can buy their main residence
While it was heading at a brisk pace towards the age of 20, the average duration of mortgage – which was still less than 18 years at the start of 2018 – had experienced a slight decline in April, plunging back below 19 years. But in May, it regained this all-round value (228 months), while the share of home loans granted between 25 and 30 years did not stop becoming the norm (41.4% of contracts signed, against 39% between 15 and 25 years).
It must be said that the level of personal contribution is also decreasing (-10.6% in the first five months of 2019), while property prices are still increasing as much in major cities. Consequence: the average relative cost of a property purchase represents 4.4 years of income (+ 2.3% since the start of the year). Figures pulled up by low-income households who now have access to mortgage loans thanks to these relaxed conditions.