Competition and competitiveness of banks, stable demand for real estate loans … The market is conducive to renegotiation.
According to the Crédit Logement / CSA Observatory , rates had already fallen by an average of 0.05% between December 2015 and January 2016, regardless of the duration of the loan.
But renegotiation is all the more interesting for loans taken out before April 2014, when interest rates were lower. First-time buyers having set up their loan before that date are likely to be more and more represented in the share of renegotiations made.
Falling interest rates, the main reason for renegotiating
Rates continue to fall, it’s a fact. The reasons are multiple:
- the ECB (European Central Bank) maintains its support for the real estate market, be it new, old or rental investment,
- banks want to keep their production at the same level as in 2015,
- inflation does not go away.
Naturally, borrowers have a real interest in renegotiating their loan under these conditions .
It should also be noted that it makes it possible to reduce the monthly payments or to reduce the duration of the loan if the incomes of the borrower increase.
Do not forget what makes renegotiation an interesting operation
Thus, all seers are green so that borrowers can renegotiate their home loan in an advantageous way. But for a successful renegotiation, it is always necessary to measure the balance of power between:
- the rate currently borrowed by the borrower,
- the amount remaining to be repaid,
- the remaining repayment term,
- the conditions that the operation allows to obtain.
Finally, we must keep in mind the causes of a possible reversal of the situation.
Although nothing announces such developments, if the ECB changed monetary policy and, or the rates posted by the banks went up globally as in July 2015, renegotiating would be less valid.
Recall that the real estate market is doing well as a whole
- the Pinel scheme , which makes it possible to deduct part of the purchase price of a dwelling on the condition that it is rented, is valid until at least 31 December 2016,
- conditions for access to PTZ (zero interest rate loan) have been relaxed ,
- real estate prices are stable.
On the borrower side, household confidence has improved according to INSEE (National Institute of Statistics and Economic Studies). Households are indeed more likely to consider that it is currently appropriate to make significant purchases, including through increased purchasing power.