How to reduce the overall rate to obtain a mortgage

The rise in rates continued in April, leading to the exclusion of more and more potential buyers. But there are solutions to borrow anyway.

As expected, real estate rates continued to rise in April. Already in March, some banks had sent several rate schedules during the month, under the effect of the sudden rise in the 10-year government borrowing rate, which rose from 0% at the end of December 2021 to more than 1% at the start of April. a return to its level of April 2017, specifies the broker Vousfinancer.

Most banks, national or regional, raised their rates in April by 0.05 point to 0.45 point for one of them, which had already raised its rates by 0.30 point in March (bringing the total increase to 0.75 points in two months in this establishment). The average rates offered increase in April to 1.25% over 15 years, 1.45% over 20 years and 1.65% over 25 years. The rates for the best profiles are also rising while still remaining attractive: 0.90% over 15 years, 1% over 20 years and 1.25% over 25 years.

What generates besides a scissor effect on the rate of wear, this maximum rate to which one can borrow (insurance included). Because the latter is calculated according to the data of the previous quarter (this is the average effective rate, to which we add a third). However, this rate of wear has dropped recently.

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Julie Bachet, managing director of Vousfinancer, analyzes: “The wear rates no longer correspond at all to the reality of the market, because of their method of calculation which generates a lag and an inertia: for proof, over 20 years and more , the most common credit terms, the wear rate fell by 20 points (basis, or 0.20 point, editor’s note) in one year, from 2.60% to 2.40%, even though credit rates have increased by 20 points (basis, editor’s note). In April 2021, we borrowed on average at 1.25% compared to 1.45% currently, with a historically low wear rate”.

Find the bank with the best rate

But the broker specifies that there are solutions to lower the annual effective annual rate, this rate which must not exceed the rate of wear, under penalty of the credit being refused. As a reminder, the APR includes the interest rate, administration fees, guarantee fees, insurance fees and brokerage fees.

First of all, Vousfinancer recommends putting banks in competition or negotiating the credit rate: “Thus over 20 years, for €200,000 borrowed by a couple with €42,000 in income, the rates offered range from 1.3% to 2 .15% according to the banks, with a strong impact on the APR which then goes from 2.06% to 2.90%, with insurance at 0.30% and other costs included”. In addition, the broker points out that it is possible to negotiate a rate discount of 0.10 point by slightly increasing its contribution, or by repatriating savings.

Negotiate filing fees

Then, it is advisable to negotiate the application fees. “Going from €1,000 to €0 in the same example, helps to reduce the APR from 2.20% to 2.15%”, recalls Vousfinancer who adds that it may be interesting to take out an insurance delegation: ” As the cost of insurance weighs heavily on the APR via the TAEA (Effective Annual Insurance Rate), taking out insurance delegation can make it possible to lower it significantly. over 20 years, the APR with group insurance, on initial capital, of 0.30% is 2.20% against 1.81% with delegated insurance, on capital remaining due at 0.15%”.

Reduce the insurance quota

And finally, it is possible to reduce your insurance quota or take an additional quota. “With group insurance at 0.30% to 100% on each head, for the same loan of €200,000 over 20 years at 1.40%, the APR comes out at 2.74%, i.e. higher than the wear rate, against 2.20% for the same insurance at 50% on each head.In the event of a significant income gap between the 2 borrowers, it is also possible to insure 100% of the borrower with the highest income, and in a lower quota for the other borrower”, calculates Vousfinancer

The broker adds: “if however the borrowers want the best cover, it is possible to insure each of the borrowers at 50% in the bank, which is the minimum required, so as not to exceed the rate of wear, and to put in places an additional insurance quota in a second optional contract at 50% on each head with the surviving spouse as beneficiary, the cost of which, moreover often lower, is therefore not included in the calculation of the APR, nor in that of the debt ratio”.

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