Mortgage Rates Should Remain Low Until End of the Year

Mortgage rates are expected to stay low
Mortgage rates are expected to stay low
The front of an agency Crédit Immobilier de France (CIF) in Paris – Jacques Demarthon AFP

The mortgage rates are expected to remain at levels …

The mortgage rates here in France are expected to remain at historically low levels until late 2015, say credit brokers.

Friday Immoprêt broker observes in its latest barometer, from May to June, credit rates have mostly fallen “for the first time in recent months, although some have started rising again.”

For Mortages over a period of up to 25 years in particular, he noted “a rise in interest rates for the northern region of 2.30% to 2.50% and 2% south to 2.35%.”

“However, these increases are mainly related to business policies of banks,” said Ulrich Maurel, founder Immoprêt.

“The evolution of the business strategy of a bank is not enough to talk of market downturn,” judged by a Cafpi broker, referring to the rise of 0.10 percentage point made by LCL in mid- May

“The Bank, which aims to be one of the most competitive on mortgage rates, has actually cancelled a decrease of 0.10 points decided fortnight earlier, to better adjust to market levels”, a spokesman for LCL explains, “and the rates remain among the most attractive market.”

After a continuous decline in interest rates since September 2014, they have now evolved to be at historically low levels.

Immoprêt believes they will stagnate over the next three months, before beginning a slow recovery in the last quarter, while remaining low until the end of the year.

“A significant increase in rates is not relevant: the trend is stabilizing,” said a Credit Broker from ACE.

The significant rise in recent weeks on the bond market, the borrowing rate to 10 years in France (OAT), nevertheless raised some concerns.

Reference for loans fixed and special rate, it could indeed foreshadow a rise in mortgage rates.

“But mortgage rates were not affected and remain very low,” says Joel Boumendil, CEO of ACE Broker Credit. “Some banking networks have even posted rates down in recent weeks,” he notes.

“They should not not go up in the coming months, especially as the European Central Bank (ECB) still has the desire to maintain floor rate,” says ACE.

“Overall, the trend is clearly to stabilization,” said the broker.

In addition, the significant cash flow available to French banks allows them not directly affect a rate hike when it happens in the financial markets, concludes Immoprêt.

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