Good time to buy as rates slump
Mortgage costs have fallen to their lowest level since the Second World War
MORTGAGE costs have fallen to their lowest level since the Second World War, averaging out at 3.3 per cent in September, the most up-to-date figures available.
Tumbling from the most recent high of 5.15 per cent in November 2008, it is a remarkable turnaround that has seen buyers returning to the market and pushing up prices in Paris and other major cities.
Moreover, it also comes as the exchange rate for euro has risen from €1.20 to the pound in the summer to today’s €1.13. In November 2008, the pound bought €1.23.
The price of borrowing money for a mortgage is 10 per cent lower than in December 2008 according to a study by the Observatoire Crédit Logement/CSA.
The total of money loaned has not risen to match the fall in mortgage rates. Banks are expected to loan €140bn in 2010, up 17 per cent from 2009, but well short of the record €170bn in 2007. The low interest rate is expected to continue, possibly until next summer.
Housing prices in France have risen by 140 per cent since the end of the 1990s, and have increased 22-fold since 1964.
Economist Michel Mouillart, who led the OCL/CSA study, said that the favourable credit conditions would inevitably lead to a rise in housing prices.