As mortgage rates rise, the question arises of the term and amount of the loan. Should the credit envelope be reduced by freeing up all of one’s savings? I’m not sure.

If you are a poker lover, all-in has no secrets for you. But when it comes to real estate credit, which strategy to adopt? Put all your savings on the table to borrow as little as possible or, conversely, borrow as much as possible? The question worth asking, especially in this period when real estate rates are on the rise.

For Mal Bernier, spokesperson for the broker Meilleurtaux, the answer is clear: that’s the reality borrowing rates, even if they rise to around 2%, remain very low with much stronger inflation, so borrowing as much as possible remains the most attractive option. A vision shared by Pierre Chapon, co-founder of the broker Pretto: despite the increase, if we look at the long term, rates remain very interesting today.

Real interest rates still negative

While the interest rates for home loans are fixed, those for our savings products change with inflation. Calculated at 5.9% over 12 months in June according to INSEE, the latter affects many families but also affects your savings. For the time being, the returns on overall savings have not yet increased, but logically they will progress in August, says Pierre Chapon. If we compare mortgage rates with the return on savings, it usually remains more attractive to borrow as much as possible. Real interest rates remain negative.

Livret A 2%, LEP 4.5%: the theoretical rates for your savings from 1st August

The rule would therefore always be to put as little personal savings as possible. In fact, many people today are all the same forced to put their savings to good useeither because their borrowing capacity has declined as interest rates rise, or because otherwise the project is not feasible, tempers Mal Bernier.

An obligation observed since the implementation of the new rules which impose, except for exceptions, a debt ratio of no more than 35% for a maximum period of 25 years. Some borrowers are forced to put in more so that the monthly payment is not too high. If we observe an increase in the personal contribution in recent years, it is not because the banks are asking for it but to fall below this 35% bar, confirms Pierre Chapon.

Professionals: cheaper online offers for limit bank charges

Limit your personal contribution

Those who have a choice, on the other hand, would be advised not to go beyond a certain threshold. If most borrowers wishing to purchase their primary residence have to pay a 10% personal contribution to cover ancillary expenses (application fees, notary fees, etc.), adding a little more is a good idea. There are banks that will offer a bonus rate if the borrower shows up with the application fee of 10% plus 10% of the property valueasks Pierre Chapon. Bringing up to 20% of the property’s value can be interesting, but beyond that the rate doesn’t change much.

It would therefore be better to keep your money for an impromptu expense such as a boiler change, for work or for a future real estate project: keeping savings is the possibility of making a contribution towards a rental investment, recalls the co-founder of Pretto. Putting more than necessary on a first real estate project would be a shame, it could prevent you from doing a second one.

Whatever your decision, you’ll be asked to keep a precautionary savings to deal with a blow. It is therefore advisable to set aside the equivalent of three months, in a booklet A for example, where you can easily unlock the money.

Real estate loan: find the best rate

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