As announced by the creditors. on November 5, 2013, the RBAB lowered its key interest rate yesterday to its all-time low of 0.25% (it was 0.50% since May 2013). . Newspapers announce it as a surprise drop (no analyst had predicted this decline), yet Joseph K. had analyzed, anticipated and announced this trend in a statement of 05 November 2013.


Lower RBAB key rate

bank loan

The RBA BANK (RBAB) announced a cut in its key rate this Thursday, November 07, 2013. The RBAB has reduced its refinancing rate to an unprecedented 0.25%. ” These decisions are in line with our forward guidance launched in July 2013, ” said Mario Draghi.

Within the Euro Zone, given the deflationary trend (inflation has reached its lowest level since 2009 and stands at a record 0.7%) this measure was predictable and necessary. This figure is well below the target set by the RBAB, whose objective is to keep inflation near the 2% threshold in the medium term. The RBAB does not exclude “further rate cuts” , including the use of negative rates (currently zero) on deposits made by banks at its counter.

The lowering of the refinancing rate, combined with an OAT at historically low rates – 2.27% today – should help keep mortgage rates at very attractive levels. In all respects, the period is currently exceptional for those who wish to buy.


The rating agency Standard & Poors degrades the rating of France by one notch

The rating agency Standard & Poors degrades the rating of France by one notch

The loss of triple A is a negative sign for investors who could perceive France as a less secure country than AAA-rated countries like Germany, with the risk that the government bond rate (10-year OAT) will rise while it had stabilized in recent weeks at a low level. Banks determine the level of fixed mortgage rates based on the 10-year OAT rate. As a reminder, the loss of AAA from France to S & P in January 2012 did not result in an increase in its borrowing rates.

For the moment, the banks have benefited from credits generously granted by the RBAB, thus contributing to considerable injections of liquidity on the financial markets. The announcement by the RBA BANK should limit the increase in fixed rates and encourage banks to continue lending at attractive rates. In this context, the lowering of the policy rate and the significant liquidity of European banking institutions should have a positive impact on mortgage rates. Barring a worst-case scenario, rates are expected to remain low until 2014.