Interest rates : Stay tuned

  |   Real Estate News

The summer period is usually quiet enough for distribution of mortgages , it is mostly in September that the influence of long rates could be felt…


The tension in interest rates


In France , the yield of the OAT 10 years rose to 1.33% this week, a new record since September 2014. While most economists believe that rising of sovereign yields will not last because of the buyback program of ECB that is set to continue for more than a year, this increase in the refinancing of banks ( 10-year OAT fell to 0.33% in mid- April ) was reflected in the interest rates of mortages.


Rising interest rates in real estate : A business strategy


The broker estimated this week that a dozen banks have increased their mortgage rates in June , from 0.05 to 0.30 points. However, most banks kept their rates stable even with a few drops.


Mortages : banks are overwhelmed also remind us that many institutions , overwhelmed by the wave of renegotiations and redemptions of loans since the beginning of the year, had accumulate delay during the month of May because of the numbers of Bank Holiday and need to reduce their incoming stream.


The brokers warnings


Several brokers note that some banks have already warned them that they intend to increase their prices scale in the coming weeks. The direction of bond yields in recent days could therefore decide others. The summer period is usually slow for distribution of mortgages and it is particularly in September that the influence of long rates could be felt.


Subsequently, in September


By then, a reflux of 10-year OAT remains quite possible, which indicate that we should be careful about scenarios for real estate rates evolution. Although increases of 0.2 % to 0.3% were applied by the end of the year, the average rate on 20 years would only increase from 2.3 % to 2.5 % or 2.6% , it is still well below the levels of the summer of 2014 ( 3%) and the cost bear by borrowers in early 2014 ( 3.5%).