Mortgage loan rate: 10 months down!
While summer is generally a period of stagnation or even rate hikes, this year they continued their plunge which started 10 months ago.
On average, banks, therefore, lend at 2.70% over 15 years and 2.95% over 20 years, which is 5 and 10 points lower than last month.
Those who wish to buy for the first time and who prefer long terms are also beneficiaries of this drop: loans over 25 years also fell by 10 points to settle at 3.40%. As a reminder just four months ago, banks posted this tariff for credits over 20 years.
Banks are looking for customers…
To justify this drop, Thierry Bernard, president of Lite Lender, looks mainly at the banks: “ The establishments are far from having fulfilled their commercial objectives, so they will seek to attract new customers. And for that, they can offer additional rate reductions of the order of 0.20% ”.
… And borrow at low prices
Another factor that explains these extraordinarily low rates: OATs (Obligations Assimilables au Trésor). These correspond to the rates at which the banks borrow the money then loaned to individuals. These OATs are today very weak. Banks can, therefore, afford to lend at low rates while maintaining their margins.
The two tips in times of low-interest rates:
1. Renegotiate your credit. If you already have a home loan, you can still take advantage of lower rates by renegotiating your loan under current borrowing conditions. To understand everything about this operation and to know if it would be interesting for you, consult our guide on the subject.
2. Negotiate a credit transfer. Since rates have never been so low in 70 years, it is a safe bet that this period will not last forever. It may, therefore, be advantageous to obtain a credit transfer option from your bank in the event of purchase-resale.
Concretely, if you sign today with this option a mortgage at 2.95% over 20 years and that in 10 years you sell your property to buy another, you will have the right to transfer your acquisition conditions to this property. So, if you have $ 100,000 left to repay and your new home is worth $ 300,000, you can finance a third of the amount of your property over 10 years at 2.95% even if the rates have increased to 4%.
Take advantage of our expertise at the best rate, it’s easy and free!