With an average rate hovering around 1% over twenty years excluding insurance, aspiring homeowners can be happy to borrow at a lower cost to finance their future home

.

But that's no reason to sign the first offer that comes along.

A benchmark indicator

Know first that you will pay more than the rates indicated, since the barometers that show the evolution of fixed borrowing rates never include additional costs.

This comprehensive overview of market trends should therefore be taken with a grain of salt.

When you canvass the banks, the annual percentage rate of charge (APR) will be the law.

Mandatory in credit offers and agreements, this indicator takes into account all the costs of the loan: interest, administrative fees, guarantees, intermediation and compulsory insurance (risks related to death, disability, incapacity for work, etc.).

It is therefore a reference tool for comparing proposals.

However, it does not do everything.

Misleading numbers

According to a recent analysis by Securimut, a broker specializing in borrower insurance (a subsidiary of Macif), the calculation of the real cost of a loan cannot be summed up by the APR alone.

Especially since, according to the expert, the banks leave its costing "an increasingly important part of the loan insurance sold".

Likewise, at the same overall interest rate, one offer may be less attractive than another, particularly in view of the insurance offered.

Indeed, the distribution of contributions over time can easily change the situation.

For example, insurance coverage may cost more than another at the start of credit, then decline over time.

Except that mortgage loans last on average only eight years, before the property is resold.

Enough to change the effective cost of credit.

Tenths that are worth a lot

If the APR obviously remains an important point of reference, we should not therefore bet everything on it. In addition, remember in particular to consult the annual insurance equivalent rate (TAEA), which allows you to know the real cost of this cover expressed in rate and therefore to determine its importance in the various loan costs. When we know that this insurance protection reaches on average 30% of the total cost of a mortgage, a few tenths of points more or less can represent thousands of euros over the entire duration of the loan. Securimut also advocates completely removing insurance from the calculation of the APR and putting more emphasis on the TAEA to compare its cost.

Finally, remember that beyond the amount, it is essential to compare the guarantees of the contracts in order to best optimize your coverage, not forgetting that the law allows you to change insurance throughout your credit. .

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