What’s happening here?
With French mortgage interest rates just above their all-time-lows, the number of new mortgages in France is set to reach a record figure of €260 billion in 2017. This is due to favourable market conditions with French and international buyers who are keen to capitalize on cheap mortgage rates, well priced property and stable price increases.
Why is it important?
The French mortgage market has been extremely active in the last year. Despite the recent slowdown over the holidays, the total amount of outstanding loans in France reached €935 billion in August – a 6% increase for the same period year-on-year. Since the beginning of 2017, the total value of registered new loan offers in France has seen an incredible 50% increase totalling €210 billion for the year to date. Even in the most conservative scenarios, the predicted cumulative sum of new house loans will surpass the previous record of €251 billion set in 2016, according to Les Echos.
How does this affect me?
With the end of the year looming, the French banks are keen to finance projects that will complete this year to maximise their revenue towards their annual targets. This means they will be prioritising applications which they think can be completed before Christmas.
The bigger picture
In spite of the record year in progress for mortgage volumes, there still seems no immediate threat of increases to long term French mortgage interest rates. Once this Bloomberg index goes consistently over 1%, we will start to see adjustments to interest rates.