Real estate loans that were purchased several years ago may be interesting to renegotiate. This is particularly valid during periods of low interest rates as at present. Other parameters will be important before considering such an operation, it is firstly the status of the repayment period, namely that it must be between the first or the very beginning of the second third. A second very important element is the gap between the current mortgage rate and the new one, which must be at least 0.8 point. The repurchase of real estate credit is then possibly profitable provided to make well its calculation.
State of play of interest rates in recent years
This is a fact, since 2016, the housing market has kept interest rates low, allowing many households to access the property. Moreover, the year 2016 was a record year for the level of interest rates and thus 251 billion USD of real estate loans were granted. This figure, which had not been seen for several years, was achieved thanks to numerous renegotiations and loan redemptions. Thus in 2016, with rates averaging 1.31% in November, all durations combined, many first-time buyers or investors were able to increase their wealth.
The year 2017 has hardly changed, however, the slight rise in rates in December 2016 (1.34% average) foreshadowed an increase, which finally took place on a small scale. Some major cities of the metropolis enjoyed a particular dynamic that year, which resulted in a considerable price increase. This is the reason why the banks had no interest in raising rates, which would have inexorably stopped this momentum. The damage would have been felt by households in search of acquisition, but also by banks and credit institutions.
2018 has been stable throughout the year. The average rate recorded in October was 1.43%, a figure not far from that recorded in 2016. Moreover, it is lower than inflation, which is extremely rare. It goes without saying that these low-rate data are a real opportunity for rather modest households who want to buy a home. But they are not the only winners of this windfall, the candidates for the redemption of credits are also concerned, because the interest rates were sometimes higher several points a few years ago, they could make great savings.
The trend of rates for 2019
Experts are all more or less in agreement, interest rates should not know real recovery in 2019, despite statements by the EB (EurCen bank) announcing a rise in key rates for the summer 2019. Things are moving and the economy is experiencing risks that directly influence this situation. Growth is slowing down, the next global recession is in the air, Italy is experiencing the crisis, Brexit, energy and oil prices are rising: all these parameters suggest that a change in rate policy for 2019 is still far from being realized.
The banks made real efforts in 2018 to support real estate projects granted to non-contributory files and long repayment terms (25 years and beyond), ie to first-time buyers. According to some experts they should certainly continue this policy to attract new customers. With a current average rate of 1.6% over a 20-year period, and a 2018 year-ending phase with an average all-season rate of 1.45%, that of the year 2019 should not exceed 1, 9%.
The mortgage market seems to have a bright future for the year 2019 with interest rates that will undoubtedly be very attractive. Banks are ready to continue playing the game of as many funding deals as possible, especially to achieve their business goals. However, they may be more stringent in terms of collateral requirements for higher-risk files, such as a larger contribution or a larger margin of livelihood.
The redemption of credits in this context
With respect to the renegotiation of its mortgage, two options are available to the borrower: either negotiate a new, more advantageous interest rate with his bank, or go through a specialized broker to carry out a real estate loan buyback, with a new contract and new conditions.
With regard to borrower insurance, the changes in the law allowed borrowers to no longer be committed over periods of 10, 15, 20 or 25 years. From now on, the contract can be changed from the first year and this can have a real impact on the amount of the monthly payment according to the chosen offer. The only condition is that the borrower has the obligation to present a contract with guarantees identical to that of the bank or lender. The credit rate will of course not be changed, even if the borrower uses a delegation of mortgage insurance.
To find the best buyout of current credits, it is possible to perform simulations online: establish a ranking of the best organizations at the start, then visit their site and fill out the forms. This is possible both for a buy-back only, or for consumer loans, or both. The main criterion of an offer is of course the interest rate, which will vary according to the desired amount. However, it is the APR that will have to be based because it includes all credit charges.
Make a simulation online
All online simulations are free and non-binding. Moreover, they usually only take a few minutes of time. In just a few clicks, a personalized offer can be obtained simply by providing information on the proposed purchase of credits (amount of capital remaining due, desired repayment period) and the personal and professional situation.
Comparators exist to guide future borrowers in their approach to buy credit to which they often know nothing when they start the procedure. Intermediaries, brokers are there to accompany them in this task, and especially advise them on the best lender organization. Specialized and with great expertise, they will be able to make a personalized return to each request, while directing the applicant to the offer that best fits his situation. Banks and credit organizations have changing interest rates, as do conditions that vary. Some accept real estate loans with consumer credit, others do not.
Regarding the negotiation of a purchase of credits, several elements are negotiated, both the interest rate and the commission of the broker, the prepayment and the expenses of record and insurance. After getting several offers through simulations, they can very well serve as a bargaining tool to compete. Trading will always be easier on fees than on rates. Of course a good record with good guarantees and a balanced management of finances will be more likely to see his requests granted.