Finance your apartment in Paris at the best market rate

Published on 06/21/2020

Paris is the city of France, our capital, and one of the cities in the world where the real estate market is the tightest. Prices have continued to climb since the early 2000s. Yet the most beautiful city in the world continues to attract many buyers. Do you want to start buying real estate in Paris, in the city of light? It is definitely a good investment! We have chosen today to help you find the best mortgage to finance your property in Paris.

Rates for early 2019

Real estate rates are currently at their lowest for at least 30 years, now is the best time to buy. Despite a general rise in real estate prices, the cost of loans is very low and the rates over 20 years are close to 1%.

Knowing that the mortgage is not a very profitable product for banks, it is difficult to go any lower. On the contrary, the rates are announced to increase for 2019.

At the macroeconomic level, it seems that the rise in rates is planned for the second half of 2019. Real estate rates are governed by central banks. In the United States, the FED (Federal Reserve of the United States) continues to raise key rates. In Europe, the European Central Bank plans to end its policy favorable to low key rates for the first half of 2019. This change could be felt in the second half of the year, you have a few months left to take advantage of these very low.

Despite an expected rise in rates, banks continue to attract customers with favorable credit terms to achieve their commercial objectives for the year. In the meantime, they are maintaining their low interest rate policy. The 10-year OATs (Obligations Assimilables au Trésor), the long-term loans issued by the State to finance itself, are stable at around 0.60% for January 2019. They are a good indicator since their increase leads to that of the real estate rates and vice versa.

Find the best real estate rate

You got it, it's a good time to buy. However, real estate rates are not the same in all banks. How to explain that the banks make such different proposals?

You should know that credit remains a risky product for banks because it is not very profitable. It is above all a way to attract new customers, in particular by requesting a direct debit of income, and to retain them. They choose to adapt their rates to the products they can potentially sell you during the term of your mortgage.

It is very difficult, if not impossible, to find the best rate the first time. Even if you have been loyal to your bank for a very long time, there is a very good chance that the rate offered will not be the most attractive on the market. It is important to have competition in order to be able to negotiate your rate. Comparing banks can be very long and tedious; you can also call on a broker who will find the best rate for you: that is his job.

For example, Pretto is an online real estate broker that offers you to simulate for free, for 5 small minutes, your home loan. If you like the offer, simply register to be put in touch with a credit expert to discuss your project and obtain valuable advice.

Indeed, in reality, many factors impact your mortgage rate: your personal situation, the type of project, your income or the duration of your loan. The higher the “risk” for the banks, the higher your rate will be.

It's not just the rate that counts

Rest assured, the real estate rate is not everything! Despite what one might think, many other parameters come into play. Even if you benefit from a low rate, certain conditions can have a strong impact on the cost of your credit.

To help you understand and compare the rates, we have chosen to detail the elements that make them up:

  • The nominal rate: this is the interest rate of the loan.
  • Borrower insurance: an estimate at the time of the agreement in principle is offered to you, but you will only obtain the final cost after completing the health questionnaire
  • Application fees: banks charge administration fees for a loan application. Online brokers like Pretto negotiate them for you from the banks.
  • Brokerage fees if you go through a paying broker (Pretto is 100% free)
  • Warranty fees

These costs are numerous, they are combined in the APR (Global Effective Annual Rate). This indicator is your ally for directly comparing competing offers (over the same period). It indicates the overall cost of a mortgage.

A home loan commits you for many years, it is good to anticipate to know what conditions would be most favorable to you in the future. Some flexibilities can be very interesting. The maturity modulation allows you, for example, to reduce or increase your monthly credit payments as needed. The conditions are often detailed in the results of your loan simulation and can be negotiated, talk to a credit expert like Pretto!

Photo by Raw Pixel/Unsplash


Parisearch, a local agency expert of the Parisian market

Parisearch is a real estate agency in Paris.

Connected 24 hours a day to the market and its network, it responds to all requests for research or sales of real estate in Paris and the Ile-de-France.

Its objective is to accompany its customers in the realization of their project of life by securing their step and by allowing them to reach rare goods (off-market) which will make their happiness and will answer perfectly their criteria.

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