Real Estate: Good News for Borrowers, Here's Why “Credit Rates Should Drop Further” in Early 2025

Les taux du crédit immobilier devraient poursuivre leur tendance baissière dans les prochaines semaines, après la baisse des taux directeurs de la BCE. MAXPPP – Jean-Luc Flémal

Despite political instability, the downward trend in rates, particularly real estate rates, should continue in the coming weeks, specialists assure.

On Thursday, December 12, the European Central Bank announced a 0.25 point cut in its key rates. A decision justified by Christine Lagarde, its president, by the drop in inflation. The announcement was good news for credit professionals.

“This change in the monetary policy of the European Central Bank is very good news for borrowers, the credit market and the real estate market as a whole”, comments Julie Bachet, CEO of the broker Voufinancer.

“Offer attractive rates at the start of 2025”

She adds: “Even if it is likely that the banks anticipated this drop, as evidenced by the scales received in December, most of which were down, this new reduction in ECB rates will strengthen their ability and willingness to continue to offer attractive rates at the start of 2025.” With this decision, “the French, especially first-time buyers, should continue to see their conditions of access to real estate loans improve”, according to Cafpi, a broker specializing in real estate.

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Another optimistic analysis, that developed by the broker Meilleurtaux. “This decision is the confirmation of a downward trajectory, estimates Maël Bernier, its spokesperson. This new drop is good news for banks that partly finance themselves from the ECB”. This development has also “already been anticipated by banks that continued to lower the rate scales intended for individuals for real estate projects in December”.

Fear of a “rise in credit rates” after the censure

This announcement by the ECB is all the more good news since, “in a context of political instability, and after the government's censure, many feared a rise in credit rates”. Fortunately, “this is not the case and the monetary easing of the Institution should still encourage banks to offer attractive rates in 2025”.

At the beginning of December, most banks lowered their credit rates again. A drop of “between 0.05 and 0.30 points”. On average, observes the broker Voufinancer, “it is currently possible to borrow at 3.15% over 15 years, 3.35% over 20 years and 3.55% over 25 years, with lower rates negotiated at 3% over 15 years, 3.10% over 20 years and 3.15% over 25 years”.

“Resolve borrowers”

Some see this development as the beginnings of a market revival real estate. “Real estate prices, after having fallen, tend to stabilize, we observe at Cafpi. The reduction in real estate loan rates therefore remains the only possibility today to resolve borrowers”. “With significant gains in real estate purchasing power in recent months, it is a question of taking advantage of market opportunities”, specifies Caroline Arnould, its general manager.

These new conditions should thus allow banks “to regain room for maneuver on the credit conditions they offer, while competition continues between banking establishments to attract customers”. Optimism is all the more appropriate since the President of the European Central Bank announced on Monday, December 16, that she was planning further rate cuts.