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The majority of French people have no choice. To carry out expensive projects, like buying a home, you have to borrow and apply for credit. The credit repayment rate obviously comes into play in the choice of borrowers.
At the end of 2023, these rates were historically high, at 4.5%. As a reminder, they were only 1% in 2021, as our colleagues at MoneyVox remind us. Borrowers are watching the evolution of rates carefully. In 2024, they noted a continued decline.
As a result, currently, a 20-year mortgage is trading at around 3.20%. SO, what can borrowers expect for 2025?
A significant improvement in 2024 for credits
We will remember 2024 as a year when borrowers were finally able to breathe. As for real estate credit, the decline has been continuous since January. In fact, at the start of the year, the rate for mortgage loans was, on average, 4.20%. In December, the rate is 3.23%.
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Obviously, this drop is very interesting. Indeed, it has a concrete impact on the borrowing capacity of households. The Vousfinancer broker, via MoneyVox, explains to us why this drop of one point is very important for loans.
« In one year, compared to December 2023, credit rates have fallen by almost one point, allowing a gain in borrowing capacity of more than 20,000 euros, for a monthly loan payment of 1,500 euros over 20 yearsan increase of almost 10%. Over 25 years, the gain is even 30,000 euros in 12 months. »
Favorable factors for lowering rates
Several elements explain this drop in rates. Banks, in a context of competition, looking to attract new customers. To do this, they must offer competitive offers, particularly for first-time buyers.
The monetary policy of the European Central Bank (ECB) also plays a key role. In December, the ECB reduced its key rates. However, some analysts even predict further reductions in 2025 to support the economy. Enough to hope for a further reduction in credits next year.
Indeed, the downward trend in rates could continue in 2025. Sandrine Allonier, spokesperson for Vousfinancer, bets on commercial policies that are still as aggressive on the part of the banks. Promotional offers will still be available.
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It is based in particular on estimates. According to the latter, mortgage rates could go down at around 3% over 20 years from the first quarter of 2025.
An opportunity for borrowers to seize
With interest rates falling and banks willing to lend more, 2025 could be a favorable year for borrowers, especially those looking to move into home ownership or refinance their existing loans. 2025, or the year of credit in France!
MoneyVox, however, recalls an important element. Indeed, borrowing capacity remains conditioned by strict standards imposed by the High Financial Stability Council (HCSF). Thus, these standards limit monthly payments to 35% of household income.
Now is the time or never to start finding out for everyone who has plans which require the application for credit. After several years of crisis, 2025 could finally smile on borrowers.
Source : MoneyVox
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