After two years of status quo, the ECB comes back its main interest rate of 0.25 point, so thus moving from 1 to 1.25 ("Les Echos" from April 7). A decision which seems to sound the death knell of low rates. As the monetary institution does not preclude further increases in the year to counter inflation in the euro area, now at 2.70. "Unimportance of the scope of this increase is that the short rate which banks rely to set conditions for reviewable rate loans, said Philippe Taboret, Deputy Director General of Cafpi." O r, revisable rate represent more than 12 to 14 of our production of credit.
Remains whether if the decision of the ECB disqualifies the revisable rate and if fixed rates are preferred. Some elements of response...
"With a fixed rate, the borrower is security," says Maël Bernier, the voice of Empruntis. By opting for this type of formula, the borrower is known to readily credit rate and the cost. The monthly payment will be the same for the duration of the loan, that it spans fifteen, twenty or twenty-five years. Side rates however, credit conditions are less attractive than a few months ago. He must know that the rates of these forms follow the evolution of the OAT (like Treasury bonds). However, in view of the uncertainties facing the repayment capacity of some heavily indebted as the Greece, the Ireland or the Portugal States, it attends voltages on these OAT blow which rose soared, making leap, the same, fixed rate offered by banks for their loans. According to Empruntis, the increase reached 0.70 point for six months. And this is perhaps not complete.
However, the rate remains low. With a correct folder can get a rate of 3.95 over fifteen years, 4.20 for twenty years or 4.40 over twenty-five years. And with a good profile, it is better: 3.70 on fifteen years or 3.85 over 20 years. Only drawback: their stiffness. Being permanently fixed rate, the borrower deprives a possible decline. But it has little chance of regret, margin of decline being no more than 1 point.
With a revisable rate, is the opposite: the borrower benefits from reductions that may occur during the lifetime of the loan. Indeed, the rate is not fixed permanently. It is a reference index, generally the Euribor 3 months or 1 year.
Reviewable rate can be up or down through the knocks of the monetary market. The revision has to change the amount of the monthly payment or the duration of the credit (according to the formulas). In fact, with a rate reviewable, impossible to know in advance what will cost credit.
This option is therefore not without risk, as the ECB decided to raise its main interest rate and without excluding other increases, the Euribor will undoubtedly result. "This decision of the ECB is not much effect, banks having anticipated the rise in recent weeks", says Alain Todini, the pattern of Credixia. Currently, you can get an average footballer reviewable rate (see box) of 3.35 in fifteen years to 3.50 over 20 years. The gap between fixed rate and reviewable rate therefore oscillates around 0.70 point, which represents a significant savings. Take the example of a loan for a total of 200,000 euros for reviewable rate of 3.50 over 20 years. The monthly payment will establish to 1.160 EUR and the estimated cost of credit to 78.380 euros.
A fixed rate, the monthly payment will be at 1.233 euros and the cost of credit to 95.954 euros. A priori, gain, 17.574 euros, goes for reviewable rate. Provided that the rate does not move during any credit or that it climbs without never exceeding the level of the fixed rate could have been dropping moderate.
However, over a long period, all kinds of scenarios can occur (see table). "The reviewable loan is valid for those who are a resale within 5 to 10 years, advises Ari Bitton, the pattern of AB brokerage, economy with a reviewable rate focuses on the early years of the loan, period during which the capital repayment is very high." Turning to enough risky formulae, especially when the difference in rate is quite low, as is the case at this time, banks took the precaution to there add security locks to avoid the impact of large increases. As mentioned above, the evolution of the rate can be passed, according to the formulas, the monthly payment or the duration of the loan.
In the first case, if an increase occurs, the monthly increase but, generally, within certain limits to the amount still bearable, surplus of increase not passed on to the monthly as, where appropriate, delayed on the life of the loan. In the second case, it is only the life of the loan that evolves, that which may not however exceed five years.
Other flexibilities are planned: the possibility to repay the loan in advance toll-free or opt in loan for a fixed rate. Attention however to the terms of this transformation, not always very favorable to borrowers.