Given the latest developments in financial markets, it is certain that mortgage rates will remain close to the current extremely low level until the first half of 2015.
There is no financial reason for the rates to rise sharply in 2015.
Competition remains strong between banks wishing to win new customers. Moreover, there is a lot of liquidity in financial markets that is supported by central bank monetary policies.
The 10-year OAT – which changes according to key rates – remains at its lowest level rising to 1.13% on November 18, 2014 (against an average of 1.41% in August and 1.36% in month of September).
The 10-year OAT is a very important index to watch because it is the one that determines the rates set by banks that also borrow money in the long-term markets to sell it to borrowers by applying a margin. When the 10-year OAT falls, this generally results in a decrease in the fixed rates offered by the banks and conversely, if the 10-year OAT rises, it is to be expected that fixed mortgage rates will rise.
The stability of the ECB’s key interest rate, which has stagnated at 0.05% since September, is designed to avoid a risk of deflation . It is therefore not impossible that the ECB will decide to lower its key interest rate to an all-time low of 0% in 2015. Interest rate control is the key mechanism of monetary policy and the ECB is influencing changes in credit rates to individuals, by changing its key rate.
Evolution of the main reference rates
On these bases, it is clear that credit rates will remain low in 2015, except for external events in France or Europe.
One piece of advice, do not wait any longer to buy or redeem your home loan. The lever is all the more interesting as the money is not expensive . If you run out of time, prefer a “no cost” broker to the banker. Soliciting it will enable you to obtain negotiated rates (0.25% to 0.50% lower than a standard bank rate) and save up to 60% on the cost of borrower insurance through a delegation. less expensive insurance and with guarantees equal to those of the banks.