Real estate credit: how far can rates drop after the ECB’s decision?

For the sixth consecutive time in less than a year, the European Central Bank has dropped its key rates on Thursday. What impact will this decision have on mortgage rates?

Capital video: mortgage: how far can rates drop after the BCE decision?

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The European Central Bank (ECB) has lowered its key rates by 0.25 point This Thursday, March 6, for the sixth time in a row since June 2024. Something to count on new decreases in mortgage rates in the coming weeks, according to Caroline Arnould, director general of the CAFPI broker. Indeed, the banks are partially financed with the ECB. When the latter decreases the rate to which it consents to them, the banks pass on this drop on the rates to which themselves grant real estate credits.

It is therefore, among other things, thanks to the six reductions in the BCE rates in less than a year, against a backdrop of slowing down inflation, that the average rate of real estate credits has decreased by a point in the past 12 months, to 3% today for 20 -year loansexplains Caroline Arnould, at a press conference this Thursday, March 6. “A drop from one point of the credit rate, this represents 30,000 euros in additional purchasing power, in the case of a loan of 200,000 euros”she underlines.

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Fierce competition between banks

“Even yesterday, I received a drop -down scale for March, from a regional mutual bank. After two years of very low conquest of customers (due to the quadrupling of credit rates between the beginning of 2022 and at the end of 2023, editor’s note), the banks are currently providing fierce competition on all borrower profiles, and in particular first-time buyers»»which represent a considerable potential of income for banking establishments as their professional development and the expansion of their family, she observes.

The proof with SG (ex-general company) which in March renewed its canon rate of February, at 2.99%, and with the improved loans (at a reduced rate) of agricultural credit, Crédit Mutuel and LCL/Nexity, at 1.99%, 0.99%and 0%, respectively. Good news for households which acquire their main residence for the first time, and which had been the first victims of the rate outbreak, due to a generally low personal contribution.

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Rates at less than 3% at the end of 2025, really?

As for the best profiles, with comfortable income and savings, they are today offered rates below 3%, at 2.70%, underlines the manager. This average rate of 2.70%over 20 years, all categories of borrowers should be able to benefit from it at the end of the year, estimates Caroline Arnould. This, thanks to “The drop in an ECB’s rates point over the entire year 2025, anticipated by certain economists to support economic growth at half mast”argues the director general of CAFPI. A forecast in the middle of the Pascal Courtois range, manager of banking banking relations, which expects 2.5% to 3% by the end of 2025.

Maël Bernier, Director of Bestaux Communication, is more reserved: “Banks make big trade at the start of the year to pick up financing files but I do not see them proposed later rates less than 3%.»» For the right reason that the rate of OAT (assimilable bonds of the Treasury) at 10 years, that banks, which are also financed on the bond market, also take into account to determine their credit rates, “Having no more dropped for six months”. “La recent rise in state borrowing rates, if it is sustainable, could again encourage certain banks to increase their rates, as some had done at the end of January ”, adds Sandrine Allonier, spokesperson for youfinance.

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An unprecedented geopolitical context

Worse, it climbed 0.20 points only on Wednesday, 3.43%, in a geopolitical context of the most uncertain and fear of inflation astering with the protectionist measures of the Trump administration. “We had A hot stroke on the OAT Wednesday as we had at the time of the censorship of the Barnier government and the dissolution of the National Assembly ”relativizes Caroline Arnould. While recognizing the character “Unpublished” current geopolitical tensions.