Real estate credit: the fall in rates continues in October

Real estate loan rates continued to fall in October. Loans over 20 years are granted on average at 3.50%.

Quite a throwback. Banks are continuing to reduce the rates of real estate loans they grant to their customers. “Rates are now back at their level 18 months ago, with declines which have accelerated since the start of summer, and particularly in September, demonstrating the banks’ desire to end the year well.analyzes Julie Bachet, general manager of the broker Vousfinancer, in a press release published on October 1.

This month, average bank rates are down 0.10 points compared to September. Over 15 years, they stand at 3.30%. Over longer periods, 20 or 25 years, they now reach 3.5 and 3.7% respectively. Households with the strongest records can even negotiate 3.2% over 20 years and 3.3% over 25 years. As a reminder, under the rule of the European Central Bank, launched on a crusade against inflation, the banks had quadrupled the rates of their real estate loans between the beginning of 2022 and the end of 2023. The latter thus rose from 1% to 4% in this interval, significantly straining the borrowing capacity of households.

Rates at 3.25% in 2024?

Further proof that banks have indeed begun a strong comeback on the credit market, they favor long-term loans in order to make as many households as possible solvent. The usury rate (beyond which banks are not allowed to lend) for the last quarter of 2024 – established according to the average of the rates practiced over the previous quarter – over 20 and 25 years has become lower than that over 15 or 10 years. An anomaly because, in theory, the higher the duration of the loan, the higher the rate granted. “Banks were strongly gaining new customers, and in particular young borrowers, explains Sandrine Allonier, spokesperson for the broker. These, often first-time buyers, borrow for periods of between 20 and 25 years, over which banks have therefore lowered their rates further.”

The various players in the sector predict that average rates could reach around 3.25% by the end of the year. Banks are in fact anticipating a further reduction in the European Central Bank’s deposit rate by December. The ECB, by relaxing its monetary policy, would thus encourage establishments to lend rather than deposit their money with it. Enough to exacerbate competition in the real estate loan market. For the greatest benefit of borrowers.