Mortgage Lending: A Back-to-School Season Marked by Optimism
Several indicators are showing positive signs despite the delay in forming a government. As of early September, mortgage rates have fallen by between 0.15 and 0.30 percent.
As the new school year begins, the mortgage market is showing encouraging signs. Mortgage rates are falling, and banks are more willing to lend for the purchase of primary residences. However, rental property investment remains challenging, and renegotiating loans requires careful analysis. Borrowers must present strong applications and have a substantial down payment to secure the best terms. With announcements expected from the ECB, optimism is in order, but caution remains necessary to take full advantage of current opportunities.
As a result, rates average 3.65% over 20 years but can drop to 3.25% for borrowers with excellent credit. Banks anticipated the announcements by the European Central Bank (ECB), which cut its key interest rates again on September 12.
More good news: the days of being turned down are behind us. Banks are now eager to lend to those borrowing to purchase their primary residence, and the usury rate is no longer an obstacle. So don’t hesitate to shop around among different lenders—provided you present a solid, complete application and have a substantial down payment.
Despite these signs of improvement, some questions remain unanswered. It’s still difficult to get a loan to buy a rental property, and few investors are taking the plunge. As for those wondering whether now is the right time to refinance their loan, it’s best to wait until rates drop further. In fact, refinancing is only worthwhile if the interest rate difference between the current loan and the new one is at least one percentage point. This is to cover application fees and prepayment penalties.
(source: Artemis Brokerage)
