How to Gain Square Meters by Changing Borrower Insurance: Real Estate Purchasing Power Barometer January 2024

Real estate purchasing power barometer January 2024: gain square meters by changing borrower insurance

To guarantee your property loan, you must take out borrower insurance. The regulations allow you to freely choose the contract and change it at any time. Magnolia.fr calculates each month the number of additional square meters that you can acquire in the 20 largest French metropolises by changing your loan insurance. The monthly payment of the usury rate since February 1 has somewhat facilitated access to a property loan; however, the delegation of borrower insurance remains the only savings lever to significantly reduce its overall effective annual rate (APR) and remain under wear. Bank insurance versus delegated insurance We offer 3 borrower profiles, and calculate for each the number of additional square meters that it is possible to acquire by replacing bank insurance with competing individual insurance. Profile 1: you are a first-time buyer, aged between 25 and 35; you borrow €200,000 over 20 years at the nominal rate of 4.20% (rate for a good file as of January 8, 2024); the bank’s insurance is offered at a rate of 0.34% (average bank rate), i.e. a cost of €13,600; on the property loan insurance comparator Magnolia.fr, the insurance displays the rate of 0.09%, i.e. the average rate observed for files with the same profiles processed in December 2023. The cost of the insurance is 3,600 €. You save €10,000 by opting for delegated insurance. Profile 2: you are between 25 and 35 years old and borrow from 2 as first-time buyers; you borrow €200,000 over 20 years at the nominal rate of 4.20% (rate for a good file as of January 8, 2024); the bank’s insurance is offered at a rate of 0.34% (average bank rate) on each head, i.e. a cost of €27,200; your Global Annual Percentage Rate or APR is displayed at 5.37% (excluding administration fees and guarantee fees). on the property loan insurance comparator Magnolia.fr, the insurance displays the rate of 0.10% on each head, i.e. the average rate observed for files of the same profile processed in December 2023. The cost of the insurance is of €8,000. Your APR drops to 4.61% excluding warranty fees and other related expenses. You save €19,200 by opting for delegated insurance. Profile 3: you are between 35 and 45 years old. you borrow together the sum of €400,000 over 20 years at the nominal rate of 4.20% (rate for a good file as of January 8, 2024); the bank’s insurance is offered at a rate of 0.34% (average bank rate, with 100% loan insurance ratio on each head), representing a total cost of €54,400; your APR appears at 5.15%, excluding guarantee costs (mortgage or deposit). Note that the usury rate in January 2024 is 6.29% for durations of 20 years and more, compared to 6.11% the previous month. on the comparator Magnolia.fr, insurance is offered at a rate of 0.13% (average rate observed for files with the same profile processed in December 2023). Everyone is insured for 100% of the amount borrowed, the total cost of insurance is €20,800. If we maintain an insurance rate of 50% on each head, the cost of insurance drops to €10,400. You save €33,460 with a 100% share on each head or €44,000 with a 50/50 share. The APR falls to 4.70% or 4.49% respectively, leaving you more than enough space to integrate additional costs. How many additional square meters can these three profiles gain in January 2024 thanks to the delegation of real estate loan insurance? City Average price m2 apartment* No. of additional m2 with €10,000 savings on borrower insurance Profile 1 No. of additional m2 with €19,200 savings on borrower insurance Profile 2 No. of additional m2 with €44,000 savings on borrower insurance Profile 3 Saint-Étienne €1,331 7.51 m2 14.42 m2 33.05 m2 Le Havre €2,225 4.50 m2 8.63 m2 19.77 m2 Nîmes €2,249 4 .44 m2 8.53 m2 19.56 m2 Dijon €2,594 3.85 m2 7.40 m2 16.96 m2 Reims €2,713 3.68 m2 7.07 m2 16.22 m2 Grenoble €2,998 3.33 m2 6.40 m2 14.67 m2 Toulon €3,360 2.97 m2 5.71 m2 13.09 m2 Angers €3,252 3.07m2 5.90 m2 13.52 m2 Lille €3,658 2.69 m2 5. 81m2 12.27 m2 Montpellier €3,582 2.73 m2 5.25 m2 12.02 m2 Toulouse €3,555 2.81 m2 5.40 m2 12.37 m2 Marseille €3,571 2.80 m2 5.39 m2 12 .35 m2 Nantes €3,562 2.80 m2 5.39 m2 12.35 m2 Villeurbanne €3,865 2.58 m2 4.96 m2 11.38 m2 Strasbourg €3,879 2.57 m2 4.95 m2 11.34 m2 Rennes 3,958 2.52 m2 4.85 m2 11.11 m2 Bordeaux €4,541 2.20 m2 4.22 m2 9.69 m2 Nice €5,046 1.98 m2 3.80 m2 8.72 m2 Lyon 4 €798 2.08 m2 4.00 m2 9.17 m2 Paris €9,644 1.03 m2 1.99 m2 4.56 m2 The savings calculated are the maximum potential savings if the change of insurance occurs within the month of the signature of the loan offer.* Estimated prices MeilleursAgents as of January 1, 2024 (net seller price) Obtain your loan and gain square meters thanks to the delegation of insurance The state of the market in January 2024 A sign that the market is is recovering timidly, 11 cities have shown rising prices since last month: Saint-Étienne, Le Havre, Dijon, Grenoble, Toulon, Angers, Marseille, Nantes, Villeurbanne, Strasbourg and Lyon. In Nîmes, Lille, Toulouse, Rennes, Nice and Paris, they are falling slightly, while in 3 municipalities, they are standing still (Reims, Montpellier and Bordeaux). Note that in Paris, prices have lost 6.16% since January 2023. The slowdown in activity that began in the summer of 2022 should end in 2024 without, however, returning to the levels of 2021 and 2022. Demand is picking up and the Good news from January 2024 is that rates are starting to fall. We will see rates return to less than 4% in 2024. On the other hand, little effort from the regulator. It is not the cosmetic measures of the Banque de France put in place from January 2024 that will facilitate access to real estate credit. The maximum debt rate remains invariably set at 35% of net income, including borrower insurance, regardless of the remainder of your life. The ball is now in the banks’ court to revive the home loan market. To borrow in January 2024, the personal contribution remains a sine qua non condition (at least 10% to 20% of the amount of the operation depending on the banks), supplemented by precautionary savings at least equal to six monthly payments. Household borrowing capacity does not benefit from a significant correction in property prices (less than 4% in 2023) which could offset the increase in borrowing rates observed over the last two years. The existing real estate market continues to regulate itself to return to more reasonable values ​​than those observed after the Covid crisis. Market regulation considered too slow for some, who hoped for a clearer and faster correction, after a period of euphoria marked by a paradigm shift (teleworking, escaping large urban centers, outdoor housing). The gain generated by changing borrower insurance is significant enough in the majority of cities to fully justify the approach. Not only does the delegation of real estate loan insurance make it possible to acquire additional square meters, but it remains, in many situations, the key to obtaining your real estate loan in 2024. Let’s put an end to one of the misconceptions about the borrower insurance, which consists of thinking that you are obliged to take out the bank’s insurance. You have the choice of contract and this opportunity allows you to preserve your purchasing power in the midst of inflation thanks to the savings made by delegating borrower insurance or by changing the formula during the loan. The delegated insurance rates are always very competitive, and are even less than 0.10% for the first profile. How many more square meters by changing insurance in January 2024? The potential gain remains anecdotal in Paris due to the high cost of real estate. Elsewhere, where the cost per square meter is between 2 and 8 times less expensive, you can finance between 1.98 m2 (Nice) and nearly 7.51 m2 (Saint-Etienne) additional by opting for an individual contract with an alternative insurer (profile 1). Thanks to the savings on insurance, you can acquire the necessary surface area for a room intended to accommodate a toilet, or even a bathroom. With a gain of €10,000 thanks to borrower insurance, why not aim for an apartment with a balcony or terrace? In our second example, you can buy between 2 m2 (Paris) and 14.42 m2 (Saint-Étienne) additional, 9 m2 being the average surface area of ​​a standard bedroom and 12 m2 that of a kitchen. As for profile 3, given the high amount borrowed, the savings generated by the delegation of insurance is colossal at €44,000 if we retain the option of a 50% share on each head. It allows you to save up to 33 m2 (Saint-Étienne), or the surface area of ​​a studio, and 4.56 m2 in Paris. Long live the Lemoine law! Borrower insurance is the hidden cost of your mortgage. We forget it, even though it weighs on average 33% of the overall cost. If you were unable to take out the insurance of your choice when applying for financing, the regulations allow you to change your scenario during the loan. The Lemoine law authorizes any borrower to terminate their insurance contract at any time upon signing the loan offer, without waiting for any expiry date, and to replace it with an alternative offer with equivalent guarantees. For cheaper loan insurance in 2024, play with the competition. Here are the 4 questions to ask yourself to choose the right contract. The gain that you can make thanks to the change of borrower insurance is all the higher as the sum borrowed is large and as the operation takes place quickly after signing the loan offer, the cost of the property loan insurance calculated on the outstanding capital. Follow our advice for changing borrower insurance in 2024.

Borrower insurance
08/01/2024
2024-01-09 10:04:52
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