While mortgage rates have been fairly stable since January 2019, an unpredictable drop in March brought rates down to a historically low level! According to Capital, the fall in mortgage interest rates should be established in the coming months. With the effect of stimulating the distribution of real estate loans, and allowing banks to continue commercially speaking, correctly the year 2019!
The repurchase of mortgage is on the rise!
Interest rates remain historically low for banking operations such as loan repurchases and loan restructuring. A boon for borrowers who have previously taken out a mortgage at a high interest rate. If their financial situation allows it, this is the opportunity to renegotiate their loan and thus reduce the total cost of the borrowed money.
Refinancing products distributed by specialized banking establishments which have been able to adapt over the years in order to always be able to best meet the needs of borrowers. For example, it is quite possible to buy back your mortgage, and include in the operation the remaining capital due from consumer loans, or even include a cash envelope.
The refinancing operations benefiting from the best loan repurchase rate are those in which the mortgage share represents more than sixty percent of the amount of the operation. In other words, among all the credits grouped in the financing plan, there must be a mortgage line. Its outstanding capital must represent more than 60% of all the outstanding capital redeemed all credits (consumption, auto, work, revolving credit, etc.).
The repurchase of mortgage makes it possible to include consumer loans, and to include in the financing plan a cash line. A solution to free up cash in order to be able to carry out home improvement work (energy, etc.), or for the purchase of a vehicle or any other affected expenditure. But also as a comfort cash for which the use of funds is free.
Focus on the rates of equivalent Treasury bonds (OAT)
The rate of assimilable bonds of the Treasury (OAT) is the index on which banking establishments are based to set their interest rate scales for mortgage loans granted to individuals. The latter fell unpredictably in March 2019.
As of 04/10/2019, the 10-year OAT, which is the flagship loan on the market, and whose rate is used as a benchmark by deposit and finance banks, posted a rate of 0.317% compared to 0.756% the same period in 2018. That is a drop of 0.439% over 12 months! We also record a decrease for the period from April tenth two thousand seventeen to April tenth two thousand eighteen. However, the latter is less marked at -0.201%, going from 0.932% to 0.756%.
As for other bonds comparable to the market treasury, their borrowing rate varies according to their term of 2 years, 5 years and 30 years. Short-term borrowings remain negative for the month of April 2019. That is respectively -0.531% for the 2-year OAT and -0.271% for the 5-year OAT. In comparison to the same date in 2018, we have seen -0.489% and 0.039%. The long-term loan, 30-year OAT is stable, remaining positive until today at 1.364%.
Source: Bank One