French people earning the median wage can finally borrow more compared to last year.
“Hello. You have applied for a loan from our institution. After studying your file, we inform you that we cannot give a favorable response.” This sentence, thousands of French people must have read it in recent months. The number of loan refusals exploded last year, to the point that one in three applications was refused. But today, the sky is clearing and that is good news. Four out of five loan applications are now validated by banks, thanks to the drop in interest rates. Enough to allow, in particular, the “middle class” to return to the real estate purchasing market.
In France, the median salary (50% of the population earns more, 50% earns less) is around 1850 euros, according to the latest INSEE data on this subject. But with this income, it was previously difficult to claim ownership on your own. Or, for a small area. While applying together allows you to extend your room for maneuver, it did not always allow you to satisfy your desires. The period of contracting projects seems to be over.
While they were, on average, at 4.30% over 20 years, excluding insurance, in September 2023, borrowing rates fell to around 3.60% this month and should gradually reach the 3.30% mark by the end of the year. With this in mind, calculated by Youfinance For The Internet usera single person earning 1800 euros net per month will be able to borrow up to 104,259€, compared to 95,513€ last year. A gain of almost 10,000€, far from negligible.
What if we borrow over a longer period? On average, the duration of loans is 20 years and 8 months. However, over 25 years, the trend is similar to the previous data. Rates have gone from 4.50% to 3.80% in one year, and should fall to 3.50% in December. Thus, according to the calculations of the mortgage brokerage specialist, it was only possible to borrow 106,867 euros a year ago: at the end of the year, the loan could climb to 118,652 euros. That is almost 12,000 euros more.
A greater borrowing capacity which therefore allows today to buy, for example, 75m² in Saint-Etienne, 50m² in Le Mans, 30m² in Lille, Toulon, Marseille or Toulouse, or 20m² in Nice, to name only large cities. However, in many villages, it is quite possible to find a small house with this budget.