 The observatory of France housing loans presented on October 4th, 2010 the average of real estate loan rates for September, 2010 in France: 3,3 % (except insurances and safety fees). This is the lowest real estate loan average registered in 60 years in France. The last lowest average was 3.36 % registered in October 2005. The decline of this rate continues since November 2008 and was then 5.14 %.
For the purchase of housing, one should not feel emancipated because if one shall pay off less to the bank, one will pay more for its housing. Even if in France, the prices of housing fell on average in 2008 and 2009, don’t forget that the biggest sum to be paid during the purchase of housing is the actual price of this one and not the interests to be annually paid to the lending establishment.
Furthermore, the low housing mortgage rate of the last months benefited to the price of real estate (in the upper way) because the salesmen want to take advantage of these low rates and the number of sales increases again in France. For example in Paris, where the price of the real estates increases most, 9.7 % increase was registered between the third quarter of 2009 and the third quarter of 2010.
These low rates benefit essentially the people wishing to re-finance their existing real estate loans. They also benefit the persons having sold recently a property and thus benefiting from an important contribution for a new purchase. Those people will have then a small amount to borrow to finance their new property.
The rates of the housing loans should remain low in particular because of the competition between banking institutions, policy of the state aimed to ease the property ownership (interest-free loan, reform of the loans) and the obstinacy of the Central European Bank to maintain the key rate at 1 %.
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