Conan his real estate project at an attractive rate is an advantage for who has subscribed a mortgage. If the loan was taken out several years ago, interest rates were higher than current rates. Today, thanks to this significant drop in rates, the borrower is able to renegotiate his mortgage. It is much easier now than it was 10 years ago to find better mortgage repurchase rates for your loan.
Real estate loan redemption rates in 2016: an interesting drop
Today, banks offer competitive rates for mortgage repurchase rates.
For a fixed rate, financial institutions could offer up to 4.80% mortgage repurchase rate in 2011. At the end of 2012, the borrowing rate fell to 3.23%. Today, in May 2016, the rates are even lower as we will see.
It has never been so easy to borrow for real estate.
But first, how to renegotiate his mortgage?
How to get the best real estate repurchase rate?
The renegotiation of a mortgage is available to any borrower whose mortgage was contracted more than two years ago. To do this, it is necessary to take into account certain data such as:
- Redemption fees: application fees, penalties, guarantee
- The total cost of the mortgage
- The cost of the new monthly payments
- The amount still to be reimbursed: it must be at least 50 000 euros
- The differential between the old rate and the new one: it must be at least 1 point
- The remaining duration of the loan: the remaining duration of the loan must be greater than the time already elapsed
What are the redemption rates?
In 2016, we find the barometer of the best repurchase rates of real estate credit:
- For a long-term loan and for a fixed rate (between 15 and 25 years): from 1.04 to 1.45%
- For a short-term loan and for a fixed rate (between 7 and 12 years): 0.67 and 0.83%
Warning: this scale is an estimate and it varies from one week to another, and from one bank to another.
Here is a concrete example of the lowering of rates, once this scale has been applied.
For an average loan of 200,000 euros over 20 years, the decrease in the interest rate leads to a total credit decrease of 10,000 euros.
Read also Simulate your mortgage repurchase
This rate cut is extremely beneficial to the borrower who can renegotiate his mortgage. Although the process is a bit long, once the transaction is completed, he will be able to lower his loan or repay less every month through lower rates.