The summer of 2021 is a good time to obtain a mortgage, particularly in view of historically low interest rates. However, future homeowners need to have a solid credit history and take into account the longer loan approval times due to the summer vacations.
Strict borrowing conditions
Borrowers with a solid track record, i.e. a deposit equivalent to at least 20% of the purchase price, stable employment and an income that keeps them below a certain debt threshold, can benefit from very attractive rates of less than 1%.
According to Meilleurtaux.com, this summer these borrowers can benefit from a rate of 0.75% for a 20-year mortgage.
On the other hand, people whose files don't tick all these boxes, either because they don't have enough personal funds or because they have been financially and professionally weakened by the health crisis, are currently finding it much more difficult to obtain a mortgage.
The situation is unlikely to improve for the most fragile dossiers: in line with what it announced at the end of January 2021, the Haut Conseil de Stabilité Financière (HCSF) will give "legally binding force" to its latest recommendations from the end of the summer.
As a result, financial institutions will no longer be able to grant mortgages unless all the conditions laid down by the HCSF are met, starting with a maximum debt ratio of 35%, with some leeway for 20% of applications.
Very low rates
Interest rates continued to fall during the summer of 2021, even though they had already reached historically low levels in the spring. According to figures from the Crédit Logement observatory, the average was 1.07% in May, and is now between 0.5% and 1.3% for 15- to 25-year loans, according to Meilleurtaux.com data.
According to Centrale de Financement, the biggest variations are in 7-year and 20-year rates. For 7-year mortgages, rates have risen by 0.5%, from 0.19% to 0.24%, while rates for 20-year mortgages have fallen by 0.5%, from 0.75% to 0.70%.
Longer lead times
Whatever the borrower's profile, they need to anticipate longer application times during the summer, due to the summer vacations.
In August, as in July, the banks did not cut rates any further, to avoid having to cope with excessive demand, which would have further lengthened lending times.
Buyers planning to acquire a property in the summer of 2021 are advised to mention a 75-day period in the preliminary sales agreement, if it contains a clause suspending the granting of credit.