While the end of the year is favorable for trend analyses and forecasts for the following year, the month of January is traditionally the time to experience the truths stated a few weeks earlier. In terms of mortgage rates, what can we expect for the best mortgage rates in 2020?
Real estate rates: return to 2019 and trend for 2020
Slight rate hike in 2019
The lowest real estate rate in history was recorded in October 2016 (1.52% for a loan over 20 years). Since then, the market has increased by a few points to reach 1.75% in June 2019. Then, in the second half of 2019, the rate fell gradually to close the year around 1.65%.
In addition, the difference of 0.15 points encountered during 2019 does not result in much change for your mortgage. Indeed, on the basis of a loan of $ 200,000, this would influence the monthly payment of only $ 14.
Some stability expected in 2020
Following on from the 4 th quarter of 2019, the 2020 property rates applied in January all tend to fall – regardless of the duration of the loan.
A downward trend in line with the decisions of the Fine Bank, announced last October: with a view to reducing its support for the European economy and facilitating access to credit in the dollar zone, its rate director will remain close to 0%. As a reminder, it is from this rate that the banks build theirs: in other words, the lower it is, the more the subscription to a loan is interesting.
Without counting the positive effects of the Bourquin amendment (annual renegotiation of loan insurance) and of the decree limiting the domiciliation of income associated with a credit to 10 years.
In summary, only the return of inflation could cause property rates to rise for 2020.
2020, a favorable context for mortgage loans
Like the past two years, 2020 promises to be very favorable for real estate purchases, with its very attractive rates. As a reminder, in December 2015, the average rate was 2.44% for a loan over 20 years, while it averaged around 1.62% in January 2020.
Not to mention the renewal of key systems, such as the PTZ (up to $ 138,000 without interest) and the PINEL law (up to $ 6,000 in tax savings per year).
Note that among the best rates obtained during this first month of 2020 is a record rate of 1.18% over 20 years: a result that could reflect a stronger reconciliation of banking organizations very good files.
In this buoyant context, don’t forget to call on a real estate broker. Beyond its ability to transform this good rate into an excellent one, its assistance will force partner banks to change theirs according to the reality of the market. Without this intermediary-expert, they will not be in a hurry to apply this downward trend, which is mainly beneficial to borrowers.
The network of Good Finance real estate credit brokers – well established throughout France – is at your disposal to assist you in your efforts.