Real estate loan: the outstanding loan continues to accelerate in May

In a context of quasi-stability of real estate rates, outstanding home loans continue to increase, and even to accelerate. According to the latest figures published by the Francia Bank, growth is not the same everywhere.

The outstanding amount of real estate loans is progressing, progressing, progressing…

The outstanding amount of real estate loans is progressing, progressing, progressing...

Repetition is not trivial. Outstanding home loans are accelerating month after month (+ 5.4% in March, + 5.6% in April and + 5.7% in May) to reach EUR 921 billion in May.

Geographically, the increase in outstanding amounts varies by region. The largest year-over-year increases (April 2016 to April 2017) are observed in:

  1. Languedoc-Roussillon (+ 8.2%);

  2. New Aquitaine (+ 8.1%);

  3. Normandy and Provence-Alpes-Côte d’Azur (+ 7.9%);

  4. Auvergne and Hauts-de-France (+ 7.1%);

  5. Brittany (+ 6.8%);

  6. Corsica (+ 6.7%);

  7. Île-de-France (+ 6.4%);

  8. Pays de la Loire (+ 6.2%);

  9. Center-Loire Valley (+ 5.9%);

  10. Burgundy-Franche-Comté (+ 5.3%);

  11. Great East (+ 5.2%).

On the other hand, in terms of new loans, production tends to fall:

  • EUR 38.4 billion in January;

  • EUR 33.7 billion in February;

  • EUR 30.6 billion in March;

  • EUR 28.1 billion in April;

  • 25.1 billion euros in May.

The share of the repurchase of mortgage loses

The share of the repurchase of mortgage loses

In these “new credits”, the share of home loan repurchases decreases. From 61.6% last January, it rose to 42.4% in May.

For the record, this operation is to review with banks the terms of its mortgage, the purpose being to benefit from the current financial conditions more advantageous.

With real estate rates rising again (before stabilizing for several weeks), it makes sense that renegotiations become less attractive.

It is still necessary to relativize the rise in bank rates. It is real, but it remains moderate. According to the Francia Bank, the average bank rate rose from 1.50% in December 2016 to 1.59% in May 2017.

Do not forget the mortgage insurance

Do not forget the mortgage insurance

Ok for the real estate rate, this is an important element but it is not the only one. Borrowers should not forget about other significant cost items, especially mortgage insurance. To reduce the cost of his insurance, it is possible to make a delegation of insurance, that is to say to use an insurer other than the one proposed by his bank.

Three possibilities:

  • before signing his mortgage;
  • up to 1 year after the signature of the credit (Hamon law);

  • on each anniversary date of the insurance contract, after the 1 year deadline of the Hamon law.

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