According to the latest Crédit Logement / CSA observatory, the duration of home loans continues to increase after an extension of 4 months in 2017. The average in January 2018 was 18 years and 2 months. 60% of mortgages are repaid today over 20 years and 30% are even granted for 25 years or more, record figures.
More expected rate cut in 2018
ImportantIn 2018, the number of primo-accessions should decrease.
In fact, mortgage rates are still close to historical thresholds reached in previous years. Also, apart from premium files, future owners can no longer expect additional discounts.
Moreover, according to the observatory, the level of personal contribution is also rising. The youngest and most modest households are not able to provide large sums. If we add the soaring prices of real estate, these categories of borrowers are gradually excluded from the market.
Slowdown in the real estate loan market
The January 2018 production tends to confirm the trend of deceleration anticipated by experts in the real estate loan market. For the first month of the year, activity measured in sliding annual level was limited to + 2.1% and -3.4% respectively in terms of production and volume of loans granted.
Brokers also see a decline in the demand for funding, from both first-time buyers and second-time buyers.
ImportantOn average, the decrease in the number of files over one year for these professionals is 34%.
Increase in the percentage of long loans
ImportantOpting for a longer loan term is one way to borrow more in order to mitigate the effect of rising real estate prices.
Six out of ten housing loans are for more than 20 years and for three of them, it is even over 25 years. These levels are the largest ever observed by the observatory.
This evolution is not due to a relaxation of credit conditions, but to the composition of the clientele, with borrowers becoming younger and younger. In 2017, 600,000 transactions were made by first-time buyers.
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