The best rates for a mortgage

By doing your first online mortgage simulation, you probably realized that there were a multitude of real estate rates for your project. Find out why.

The first criterion used to define a real estate rate is the duration of the loan. Indeed, the real estate rates offered by banks reflect the risk they take in lending money. The longer the duration of the loan, the greater the risk of non-repayment, and therefore the higher the real estate rates.

The best way to benefit from the best rates is to reduce the duration of the loan as much as possible, but not everyone can afford it! Indeed, who says shorter loan term says less monthly payments, and therefore necessarily a smaller budget. Conversely, if you want to borrow a large amount over a short period, you must be prepared to have to repay very high monthly payments.

This is the reason why, in France, the average duration of a mortgage is 19 years, which represents a fairly good balance between monthly payments and rates. In the Pays de la Loire, more than a third of real estate loans are taken out over a period of 20 to 25 years, while only 14.4% are subscribed over a period of 10-15 years.

For the same amount and the same repayment period,  real estate rates can also vary from one region to another. This is due in particular to the various trade policies adopted by national and regional banks.

Indeed, banks use mortgages to acquire new customers. When they want to gain market share, they then offer more competitive real estate rates than their neighbors. This means that at a given time, not all banks will offer the same rates, just as it will not always be the same bank that will offer the best rates from one month to the next.
However, when it comes to varying rates, regional banks have greater freedom. It is therefore normal that average rates vary from one region to another depending on the number of regional banks located there.

The borrower profile is an important criterion in the definition of the rate of a credit. In addition to being decisive in the assessment of borrowing capacity, the level of income can also contribute to lowering the borrowing rate. As the rate reflects the risk that the bank takes to lend its money, it will be more advantageous if the borrower has a greater financial capacity than the minimum required for his loan.

For a 10-year loan in Haute-Garonne, most borrowers will be offered an ordinary rate of 0.79%. However, for the highest incomes (120 K € annually or more to 2), this ordinary rate can be reduced to 0.65%!

A mortgage over 10 years is advantageous in terms of rates, but not necessarily in terms of monthly payments. If you want to subscribe to a mortgage over such a period, you must think carefully about the weight of these monthly payments on your monthly budget, and if you will be able to bear it in case of a drop in income or lifestyle change.

In any case, you must be prepared to defend your case with banks, which are particularly demanding for loans of this duration. They will be tempted to offer you to borrow over 15 years to reduce the risk while increasing the interest.

A mortgage over 10 years is finally interesting for only a few profiles: people with very high incomes or a significant contribution, or borrowers over 60 who have no other choice to be able to be granted credit.