Mortgages, life insurance, passbooks …. the result of rising interest rates

The 10-year OAT, the French debt ratio, continues to rise. And the impact on household wallets is already felt not only in mortgages, but also in your savings. This is what is waiting for you.

Nevertheless, it is an a priori technical phenomenon Practical impact on personal budget.. The interest rate on 10-year government bonds (OAT), that is, the fixed interest rate that France borrows for more than 10 years, is rising sharply. Since February 1st, it has increased from 0.37% on Wednesday to 0.75%. It doubled in just two weeks. This is because this rate is the basis for most long-term fixed rates, especially when scrutinizing the progress of the 10-year OAT. Specifically, banks make long-term borrowings in the interbank market at slightly higher rates than 10-year OATs and then redistribute them, for example in the form of mortgages, but with additional personal payments. There is a margin. Repayment interest.

It is normal for 10-year OAT rates to rise as inflation rises, recalls Eric Dor, Dean of Economics at the IESEG School of Business. A rational investor, when he lends money, At least maintain purchasing power By claiming higher interest to deal with rising prices. In fact, inflation in January was over 5% in the euro area and close to 3% in France. Nonetheless, the European Central Bank’s current policies are curbing rising interest rates on government bonds to limit the risk of a new financial crisis and the bankruptcy of eurozone nations. Eric Doll identifies that caution in the face of rising inflation from the ECB, where key interest rates are at historically low levels, is in contrast to the Federal Reserve’s determination to act. ..

Still, we are witnessing turn around Government borrowing rates at the end of December were still in the negative territory, reflecting the exceptional situation of the economic and health crisis. This is a sign of a return to normal, says economist Philippe Kleber. Return to normal conditions that have a specific impact on households.

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End of CPR for immo credits

Start with real estate credits. Julie Bachet, general manager of Vousfinancer, had no choice but to raise lending rates under the penalty of shrinking mortgage margins, given the rise in government borrowing rates in February.Therefore, we are still in a very low rate situation, but this time really Hit the floorThere are a lot of Mal Bernier, spokespersons for Meilleurtaux.

Indeed, according to broker Artmis, rate increases have been very measured so far, about +0.2 points. According to Meilleurtaux, average bank rates have historically remained low. It is 0.91% in 15 years, 1.04% in 20 years, and 1.24% in 25 years. At today’s inflation levels, real estate prices are negative.this is Boon For borrowers whose income increases at the same rate as price increases. In addition, rising interest rates may be expected to reduce real estate price increases, as the number of individuals who can borrow may be contracted, Philippe Crevel analyzes.

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Livret A, Life Insurance … Limited Impact

And what about your investment? In the case of regulated savings like Livret A, rising government borrowing rates Not bad news.. On the contrary, it may insist on a further increase in compensation, which has already increased to 1% on February 1. But inflation needs to be taken into account. For example, the possibility of a revaluation of the Livret A rate on August 1st will not be of great help to savers if inflation continues to rise, the nuances Philippe Crevel.

Livret A: How much interest did you have in 1000 euros, 1 year, 5 years, or 10 years?

As for life insurance, the rise in interest rates is a priori and quite positive here as well. The fact that rates are rising slowly but slowly, To better reward the Euro Fund in the coming years, Philippe Crevel explains. By 2021, their returns should be slightly below the 1.28% recorded the previous year. But again, it is anesthetized by the level of inflation. Philip Kleber says this is rarely good news for savers investing in fixed income and regulated savings products.

On the other hand, the fear of insurance companies will be nothing more than a sharp rise in government borrowing rates.She will have Shear effect Emphasize Linxea by reducing the value of old bonds held by insurers in their portfolios. As a result, savers may be tempted to redeem their assets for more profitable investments. But we are not there.

When it comes to the stock market, in theory, rising interest rates are not good news.Rising bond rates Generally penalizes actions Investors consider asset risk to be low as bonds become more profitable. But still, I’m not going to leave the stock market and go to the bond market. Philippe Crevel believes, especially if we think we are in the early stages of the process.If you buy a bond right away and inflation continues to rise, its value will increase. de facto Lower. On the other hand, in the stock market, you need to choose stocks that can withstand inflation relatively, such as bank securities and luxury goods.

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