The decrease in mortgage ratefrom the end of 2023 to the end of 2024, seems to be over. After stagnating for six months, the rates are “in slight increase»»from 0.10 to 0.25 point, in September, at 3.05% on average over 15 years, 3.25% over 20 years and 3.45% over 25 years, notes the youfinance broker. An upward trend likely to continue due to the status quo on its key rates observed by the European Central Bank (ECB), this Thursday, September 11, and, even more, in the event of degradation of the solvency note of France by therating Fitch, Friday.
If mortgage rates were brought back from more than 4% to fall 2023 to just over 3% in early 2025, it is notably thanks to Eight drops of its own rates operated by the ECB in one year. The banks, which are partially financed with the ECB, have thus seen their borrowing costs decrease and have passed on to this drop in the rates to which they lend individuals. But inflation having become in accordance with its objective, the ECB left its rates unchanged this Thursday, as in July. The refinancing costs of banks to the ECB remaining stable, the rates of the credits they consent to households should logically not decrease.
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Fitch’s decision will be decisive
Another rate influences the rates of banks: that of theOat (assimilable bond of the Treasury) at 10 years, which corresponds to the remuneration required by major international investors to lend France on the financial markets. This yield went from 3.20% at the start of the year to 3.45% On September 10, with even a 3.6% peak at the end of August, when former Prime Minister François Bayrou announced his intention to request a vote of trust with deputies. Highlights by political instability and degraded finances of the country, the rate of OAT 10 years adds the cost to which French banks are financed on the financial markets. A increase that they started to pass on mortgage rates, as evidenced by the September increases.
Increases that may continue if the Fitch rating agency degrades France’s solvency note this Friday, September 12. “Today, real catalysts for mortgage rates are not political, but financial, Esides Caroline Arnould, Director General of the CAFPI broker. Fitch’s decision will be decisive : A lowering of France’s note could revive the tension on rates ”. Indeed, according to Eric Dor, director of economic studies at the IESEG School of Management, a deterioration in the country’s note, which seems likely, would inevitably result in an increase in the 10 years, which conditions the evolution of mortgage rates.
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Limited rate increases
“The absence of a credible budgetary sanitation plan, supported by a majority (parliamentary), could logically lead Fitch to degrade France’s note“, he explains, also pointing “The inconsistency of a France better rated than countries with much better budgetary performance performed and projected”. Gold, “When a degradation results in the displacement of the note to a lower category, which triggers automatic threshold effects at the request for bonds of the country by large investors, there is a upward effect on the interest rateHe continues. A lowering of the note of the public debt of France, of Aa- currently in A, “Would involve sales of French obligations (by investors) on the markets, and then a sharp drop in demand (of these obligations and, therefore, of their course). This would mechanically result in the rate of return on French obligations ”which evolves in the opposite direction to their course, deciphers Eric Dor.
“In this context of increase in state borrowing rates and break in ECB policy, mortgage rates may have reached a floor“, Confirms Sandrine Allonier, spokesperson for Toufinancer. But, “Even if the increases (September) continue, they should remain limited, due to a strong competition between banks“, she nuances. Especially since if certain banks have already fulfilled their objectives for the production of real estate credits for 2025, “The counters will be reset at the beginning of November and the credits requested will then fall into the production objectives for 2026”she adds. “We expect a slight increase in rates by the end of 2025, in a range of 3.25% to 3.5% for credit periods aged 20 to 25 »prognostic for his part Thomas Lefebvre, vice-president of selogging in charge of the data.
