The Annual Effective Rate (APR) is the interest rate that directly influences the total cost of credit. A percentage rigorously framed by the law which owes its qualifier “global” to cover both the basic interest rate, the operating costs of the bank and the insurance premiums associated with guarantees. That’s why it’s different for different institutions.
What is the evolution of the rate?
After reaching the record low of 1.31% in November 2016 , interest rates have been rising steadily over the last few months. According to the CSA funding observatory, the average level was 1.34% in December 2016 and 1.49% in February 2017.
In March 2017, the average rate was 1.51% : 1.36% on loans over 15 years, 1.57% over 20 years and 1.84% over 25 years. In April 2017, these rates will mark a new rise. Nevertheless, this movement remains reasonable: the current levels (beginning of April 2017) correspond to those of July 2016, a period considered “particularly favorable to the realization of real estate projects by households” , as underlined by the CSA Observatory / Housing Credit .
In the coming months, interest rates are likely to continue their recovery : professionals estimate that the average rate of 2% excluding 20-year insurance could be crossed this summer or September 2017. A trend that risks s in the fall, with banks that will certainly have achieved their commercial objectives.
How to know the rates charged by the banks?
As mentioned in the introduction, the APR is a “global” rate that includes three separate charges, two of which are directly fixed by the lending institution. Therefore, there are disparities between the different structures . Not to mention that some of them will favor certain audiences over others according to their commercial policy.
To know the rates charged in banks, it is therefore advisable to visit their regional sites , because not all borrowers benefit from the same rates, whether they live in Bordeaux or Lille: bank rates do not necessarily change homogeneous way.
For example, the West region and the North region posted overall lower regional scales last February, which was not the case for the Mediterranean region. However, the latter still presented some of the most competitive rates!
How can the broker advise you?
Given the constant and geographic fluctuation of interest rates, the assistance of a credit broker helps to optimize the chances of forming a good financing plan. Indeed, as a business provider, this professional has a rate grid , already negotiated, from its partner banks. In fact, it already has, from your first meeting, valuable information to formulate a first advantageous offer.
A high fork that he can present to you without risks and on which he will work to transform this first approach in good, even excellent, financial arrangement . For this, depending on your profile, he will immediately know which establishments are most likely to make you the best offer.
Then he will negotiate the various key points of the proposal by highlighting the strengths of your file. Because, beyond the interest rate, there are a large number of elements that directly influence the total cost of your credit, like borrower insurance.