Home loan rates: a respite before a rise in 2022?

After a slight rise in mortgage rates in November, the trend has stabilized. However, brokers fear that this lull will be temporary, and that rates will rise again in 2022.

A slight rise in rates in November, followed by a lull in December

As early as October, some banks began to raise mortgage rates slightly. These were followed by others, so that by the end of November, 60% of banks had increased their rates, as noted by the broker Vousfinancer.

This slight increase, partly due to the rise in the 10-year French government bond rate (OAT), was between 0.05 and 0.25 points in November, bringing the average rate to 1% for 15-year mortgages, 1.15% for 20-year mortgages and 1.40% for 25-year mortgages.

In December, the trend is towards a lull, as some brokers have noted. Vousfinancer notes a fall of 0.05 to 0.15 points, only from banks that had raised their rates the most.

The broker Empruntis has observed a fall in rates of between -0.30 and -0.05 points for 6 out of 10 establishments. According to Empruntis, this downward trend can be explained by the banks' desire to continue to focus on home loans as a means of attracting new customers, and thus begin the race to meet their 2022 targets.

The HCSF's binding recommendations and the likely increase in rates

This downward trend in mortgage rates after November's slight rise is not confirmed by all brokers. According to Pretto and Meilleurtaux, the rates presented by banks in December are in line with those of November.

According to the broker Meilleurtaux, the rise has been 0.15% in 2 months, with average rates of 0.93% for 15-year mortgages, 1.10% for 20-year mortgages and 1.30% for 25-year mortgages. Only borrowers with the best dossiers can still benefit from rates below 1%, but these are increasingly rare given the banks' stringent requirements.

These are the same people who qualify for a mortgage without a down payment. They generally have an annual income of more than 60,000 euros in their region, significant residual savings after the transaction, or substantial assets.

While not all brokers agree that rates will fall in December, they do share the same concern for 2022. As of January 1, the French High Council for Financial Stability will make its recommendations binding. As a result, banks that fail to limit loan terms to 25 years and interest rates to 35% will be liable to reprimands and financial penalties.

According to broker Vousfinancer, some institutions are planning to increase their rates in anticipation of these sanctions, which will be applied to banks that fail to comply with the HCSF rules for more than 20% of files. This is the case of one of Vousfinancer's partners, which has decided to increase its rates by 0.10 to 0.20 points for files that do not meet the HCSF criteria.