🔽 Lower interest rates: Positive news for borrowers. After a 3% increase in rates from 2022 to 2023, mortgage rates began falling in 2024. In September, the average rate for 20-year loans was 3.6%, down 0.7% from 2023. This drop follows the European Central Bank’s decision to cut key rates to stimulate lending.
📉 Income simulations: To assess the impact of rate cuts on buying power, simulations were done for loans of €250,000, €400,000, and €600,000 over 20 years. This shows how borrowers’ purchasing power has increased in the past year.
📅 Income needed for 2025: In Q1 2025, with a 3% rate, the required income will decrease for all loan amounts, making property purchases more accessible.
💡 Debt limit: According to the Higher Council for Financial Stability (HCSF), the debt level should not exceed 33% of household income. So, to get a €250,000 loan at 3.6% over 20 years in September 2024, the minimum required income will be €4,433, covering a monthly payment of €1,463.
🔍 Saving up to €500 a year: In Q1 2025, with a 3% rate, the income needed for a €250,000 loan will drop to €4,201, €500 less than a year ago. This reduction allows more potential buyers, especially first-time buyers, to return to the mortgage market.
🏠 For €400,000 and €600,000 loans: For a €400,000 loan in September 2024, the minimum income should be €7,092 (€2,340 monthly payment), dropping to €6,722 in 2025. Please write if you need help with obtaininga loan.