The Annual Effective Annual Rate (APR) is the interest rate that directly influences the total cost of credit. A percentage rigorously framed by the law which owes its qualifier of “total” to the fact of covering at the same time the basic interest rate, the operating costs of the bank and the insurance premiums associated with guarantees. That is why it is different depending on the establishment.
What is the evolution of the rate?
After reaching the record low of 1.31% in November 2016, interest rates have been rising gradually for a few months. According to the CSA / Crédit Logement funding observatory, the average level was 1.34% in December 2016 and 1.49% in February 2017.
In March 2017, the average rate was 1.51%: 1.36% on loans over 15 years, 1.57% over 20 years and 1.84% over 25 years. In April 2017, these rates will mark a further rise. Despite everything, this movement remains reasonable: the current levels (early April 2017) correspond to those of July 2016, a period “considered as particularly favorable for the realization of real estate projects by households”
In the coming months, interest rates will likely continue to rise: professionals believe that the bar of the average rate of 2% excluding insurance over 20 years could be crossed this summer or in the fall of 2017. A trend that is likely to s ” accentuate in the fall, with banks which will then certainly have reached their commercial objectives.
How to know the rates charged by banks?
As indicated in the introduction, the APR is a “global” rate that combines three separate charges, two of which are directly fixed by the lending institution. Consequently, there are disparities between the different structures. Not to mention that some of them will favor certain audiences rather than others according to their commercial policy.
To find out the rates charged in banks, it is, therefore, advisable to go to their regional sites, because not all borrowers benefit from the same rates, whether they live in Bordeaux or Lille: the bank scales do not necessarily change from homogeneously.
For example, the Western region and the Northern region displayed overall downward regional scales last February, which was not the case for the Mediterranean region. However, the latter still had some of the most competitive rates!
How can the broker advise you?
Faced with the constant and geographic fluctuation of interest rates, the assistance of a credit broker makes it possible to optimize his chances of constituting a good financing plan. Indeed, as a business provider, this professional has a rate grid, already negotiated, from his partner banks. In fact, he already has, from your first meeting, valuable information to formulate a first advantageous offer.
A high range that he can present to you without risk and on which he will work to transform this first approach into a good, even excellent, financial package. For this, depending on your profile, he will immediately know which establishments are most likely to make you the best offer.
Then, he will negotiate the different key points of the proposal by highlighting the advantages of your file. Because, beyond the interest rate, there are a large number of elements that directly influence the total cost of your credit, like borrower insurance.