Before a real estate purchase, everyone asks themselves this question: how much will it cost me? Because beyond the price of the property, it is the rate of the real estate loan and the price of its insurance which modify the final price of the investment.
In recent months, credit rates have fallen, but is now really the time to buy? We asked the question to Baptiste Continho, associate agency director of AFR financing in Charleville-Mézières.
How much are current rates on average? Is now a good time to buy?
Right now, we have to go for it and go all out! Almost a year ago, in December 2023, I would have told you absolutely not. Rates had reached up to 5% for 25-year loans, it was the most dramatic increase in the last two years. But since the start of 2024, rates have started to fall little by little. Right now, it’s around 3.5% over 25 years and 3.4 over 20 years. After an excellent record, it can even go down to 3%.
Exactly, what is an excellent file?
I'm not going to lie to you, the less risk banks take, the better it is for them. So they will favor people with high incomes and with contributions, at least the application fees, so between 5 to 10% of the price is ideal.
More that doesn't mean that without input, it's impossible, This is the role of a broker, it is to shop around the banks and find the best possible financing based on the economic situation of the buyers.
For example, I fight every day to allow seniors to have credit because a retirement pension that falls on the same date every month is more stable than a permanent contract that you can leave at any time. moment. And today's seniors have nothing to do with those 20 years ago, they are much more active.
And how much does it cost to hire a broker?
It depends on the agencies, but in general, it revolves around 2% fees on the negotiated price. What I often advise clients is to first consult their traditional bank to see what it offers them before going to see a broker to see the difference. Afterwards, nothing stops someone from taking out a loan from their banker and going to see a broker later to renegotiate their rate or their insurance.
Exactly, when is it worth renegotiating?
It's necessary at least a difference of one percentage point to renegotiate. That is to say that today those who borrowed at 5% can go there, but those who borrowed at 4% it is still too early. Except possibly for loan insurance, it is renegotiable throughout the year, there is just one month's notice.
How do renegotiations work?
There is two options : either you consult the bank in which you took out your credit and it agrees to lower your rate, or you consult other banks or a broker to repurchase your credit.
In this case, you will change banks, the new bank will buy your old credit and will offer you a new one at a lower rate. But obviously all of this entails costs, which is why you need at least one percentage point less to be a winner.
