How to save money on your home loan despite rising rates?

A complicated economic context

The Covid-19 crisis and the war that has been raging in Ukraine since February 24 have strongly affected the French real estate market. According to the Crédit Logement/CSA Observatory, the average rates for new mortgages (excluding insurance and securities) jumped from 1,1% in February to 1,38% in May. Inflation, which is over 5%, obviously influences mortgage rates and may explain part of this increase.

But inflation is not the only factor explaining this increase in rates: the rates at which the European Central Bank lends to other banks have also increased. At the end of 2021, the ECB showed rates for negative loans, that is to say that the banks borrowing from it had to repay it less money. However, today, the ECB rates exceed 1% and will probably increase further.

Indeed the ECB has announced that it wishes to increase its rates from next July in response to inflation.

This rise in interest rates can therefore harm the most modest households who see part of their budget allocated to the loan go to additional interest. Who says rising interest rates, says more space taken by them in the monthly payment and therefore in debt.

But there are solutions to prepare your mortgage application in a simple and risk-free way.

A solution to save money exists

However, it is possible to save money before applying for a loan. Do a real estate credit simulation can help you estimate your borrowing capacity and guide you towards the type of loan that best meets the needs of your project without having to commit. This type of simulator makes it possible to estimate your interest rate according to several criteria: interest rate according to the duration of the loan, amount borrowed, percentage of personal contribution, etc... With a loan simulator it It is also possible to have an idea of ​​future monthly payments, in order to be able to better predict what you will need.

Easy to use, these tools are numerous online and it can be difficult to navigate. Some, like LesFurets.com, are particularly reliable and efficient. With just a few pieces of information, you will be able to obtain examples for information only, such as the types of property, the amount of the contribution required or the duration and the interest rate, for example.

Correctly calculating the rate of your mortgage over 20 years can save money and finance other projects such as renovation work on your new property.

In short, doing a simulation saves time, saves money and avoids unpleasant surprises once the loan has been officially contracted, so why not give it a try?