To offer a comparison of real estate rates, there are many criteria to take into account. There are obvious factors:
- Amount borrowed
- Duration of the mortgage
- Financial capacity / debt ratio
But to offer a comparison of objective real estate rates, there are less obvious factors such as the place of acquisition or the possibility of being accepted. Indeed, there is no point in knowing who is offering the best rate if it is so that the file is not accepted.
PS: Our credit comparison is based on credit rates excluding insurance. When it comes to home equity, the possibility of comparing home loan insurance rates should not be overlooked. It is quite possible, the law authorizes the borrower to choose his insurer… and there are great savings on arrival.
Comparison of real estate rates: the usual factors
We will not cut to offer the comparison of current real estate rates. However, it should be noted at the outset that these rates are taken from national averages and do not take into account the credits refused. Indeed, a mortgage loan rate is assessed primarily based on a client file.
Unlike a consumer credit comparator which is offered at such or such rate and then granted or not according to the file, a home loan is first the subject of a study to know if it can to be accepted. If so, the rate at which it can be granted is then determined. Proposing a comparison of real estate rates without studying the file therefore amounts to giving an average of the rates obtained on the market. Here is a comparison of fixed and variable real estate rates for the first half of 2017. This comparison shows all of the real estate rates, from the lowest to the highest.
Updated on 28/06/2017. Rates excluding insurance.
* Revisable rate: capped + or -1%.
Classification made on the basis of the average rates observed.
The rates are understood as the overall effective rate, the legal rate for mortgage loans.
Logically, duration has a major importance on the mortgage rate. However, what this ranking of real estate rates does not show is that there may be other elements that come into play to get the best credit. Indeed, if one speaks only of financing, the contribution plays a very important role in matters of mortgage.
Indeed, obtaining a credit without contribution for a consumer loan poses no problem. Conversely, for a home loan, the contribution will be decisive whether to obtain an agreement or to obtain a cheaper mortgage rate. The contribution does not only lower the total amount to borrow and therefore the monthly payments and therefore the debt ratio. It regularly provides access to a cheaper rate.
Comparative real estate rates: unavowable factors?
There are no shameful factors but simply lesser known factors. The first of these is the “financial strength of the file”.
Financial evaluation of the file
When applying for a loan, there are ultimately only two important points:
- Get a deal
- Get the lowest rate
Get a deal
Obviously, getting a deal is the first and most important step. Proposing a comparison of real estate rates makes very little sense if the loan is not granted. We detailed the credit system refused by banks in a dedicated article. The bottom line is that there are of course mechanical rules (debt ratio, minimum income, etc.) but also a credit score. If the score is not high enough, the bank assesses a too high probability that there will be repayment problems and will not grant this loan. This score will also be used to determine the rate of mortgage loans granted.
These reasons mean that a comparison of mortgage rates is only informative and reflects an average market trend. In order to be able to give an appropriate evaluation, each file must be able to be evaluated. It is on this basis that the comparator that we have developed works. Not only does it provide an objective assessment, but it also integrates the best market offers AND the largest brokers at the national level. So our goal is to both get a deal and get the lowest rate possible.
Get the lowest rate
There are not 36 solutions, to get the lowest mortgage rate, you have to go around the market. This is the reason why mortgage loan brokers and comparators like us have the wind in their sails, beyond the provision of comparative real estate rates. Concerning the link between the mortgage rate and the evaluation of the client file, there is the credit score. We are not yet at the level of the United States or Canada, where the credit score of individuals (Credit Score) is a centralized data linked to each person with a social security number.
However, the principle is the same in France except that each bank performs this assessment. And in reality, everyone was confronted at least once with an exchange of the type “I got 1.23%, isn’t it? “Or” how much did you get from your bank? “. Obviously the underlyings are certainly to know if one is a good negotiator but also an assessment of his financial situation compared to that of others… A comparison of real estate rates is therefore essential to obtain the best mortgage rate but must be adapted to each file.
So what are the factors most influencing the credit score? There is certainly the debt ratio and the income, but it is above all the stability of the person or of the household that will become very important. For example, seniority in employment or in banking is of great importance. But the type of job too. For example, civil servants will be quite well received, to the point that there are specific offers of civil servant credit.