Real estate: Why it Will Still be Difficult to Borrow in 2023

Finance Property
Why it will be difficult to borrow in 2023 for Property

Financing a property is becoming more and more expensive with the rise in the cost of credit. In such proportions that the context of this year 2023 may call into question borrowing projects.

In recent times, prospective homebuyers need to exercise caution as interest rates continue to climb steadily. This persistent rise in rates, observed over the past year, has significant implications for individuals planning to embark on a real estate purchase. The increasing rates not only impact the monthly mortgage payments but also influence the borrowing capacity of potential buyers. To adapt to these changes, buyers are exploring various strategies, such as adjusting their budgets and considering larger personal contributions, to ensure their homeownership dreams remain within reach.

Those who have embarked on a real estate purchase project must be vigilant: interest rates have been rising continuously for more than a year. According to the calculations of the broker Pretto, for a loan of 300,000 euros over twenty years, you have to earn nearly 100 euros more per month to compensate for the 0.2 point increase in the average rate observed between April and May.

Also, for those whose salary has remained stable, this means that the amount they can borrow to finance their project is lower, which can therefore call it into question. One of the alternatives is to bring together a larger personal contribution: according to the broker Meilleurtaux, the average contribution has gone from 35,000 euros in the first quarter of 2019 to 59,000 euros in the first quarter of 2023!

As interest rates continue to rise, prospective homebuyers must exercise vigilance and adapt their strategies accordingly. The impact of increasing rates on monthly payments necessitates a thorough assessment of budgets, while the reduced borrowing capacity calls for a reevaluation of property expectations and potential financing options. By considering larger personal contributions and exploring alternative financing avenues, individuals can increase their chances of successfully navigating the changing landscape of real estate

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