As a result, the financial measures put in place by the BCE will have an impact on the short term rates on the financial market- the Euribors- which have been increasing during the last 6 months.
The 3 months Euribor, despite its decrease over the last few days, managed to reach 1.53% on the 11th August whereas last year it was 0.90%
Last Market Results according to the Credit logement rate watch (July 2011):
- AVERAGE RATES (nominal rate without insurance): 3.90%
- AVERAGE FRENCH MORTGAGE TERMS: 17.6 years (212 months)
- AVERAGE COSTS: 3.88 years of income
Rates
In July 2011, the retail Mortgage rates reached 3.90% on average.
Between November 2010 and March 2011, Mortgage rates have risen by 10 base rates a month. During the first quarter of 2011, the progression slowed down to 5 base points b a month.
Rates remained stable in July 2011 at a similar level to the one observed in September 2009 or the one during the summer of 2006 when the market was booming.
In this context, the number of variable rate mortgages allocated decreased to 7.6% in July
Length
In July 2011, the average mortgage term stood at 212 months.
After observing the slight rise of mortgage terms in the first quarter of 2011, the second quarter has benefited from their stagnation with an average term of 215 months.
The decrease of terms observed in July 2011 reflects the current volatility on a monthly basis.
APPROXIMATE COST OF FINANCIAL OPERATIONS FOR MORTGAGES
Since November 2010, the relative cost had highs and lows, without obeying any clear tendency or rule.
As a result, it reached 3.88 years of income in July after having decreased to 3.87 years in March and April and increased to 3.93 years of income in May and June.
The cost of operations has seen a constant and sold growth (+4.6% over a year since the beginning of 2011 compared to 5.8% in 2010) even if borrower incomes have increased more quickly than before, tensions remain over the relative costs.
The OAT 10 years - "state borrowings" - are going down. Between July and August, the index plummeted from 3.44% to 3% despite having reached 3.80% in April.
This phenomenon can be linked to the economic situation of very indebted countries such as Greece or Spain who acknowledged a decrease of their rating which then led to a raise of mortgage rates in these fragile states, and a decrease of mortgage rates in more stable countries.
In August, most banks decided to maintain their rates unchanged: 75% of SextantMortgages.com's bank partners have opted for this solution.
Sebastien Bessadi of Sextant French Mortgages, says:
"In September, if the OAT continues to decrease, French banks will then be in a position to offer slightly better interest rates and will try to take advantage of these key autumn months to gain new customers."
