RATES OF THE MONTH
FINANCIAL MARKETS
Short term rates (Euribor 1 year) are used to calculate variable rates and long term rates (OAT 10 years) to calculate fixed rates.
For few months short term and long term rate are very close which happened only 3 times since 1990: first time in 1990 where both short and long term rates established at 7.90%, second time in April 1995 at 7.90% too and last time in November 2000 at 5.40%.
| 01/03/2007 | Variation | Trend | |
| Euribor 3 months | 3.891 % | ||
| Euribor 1 year | 4.104 % | ||
| OAT 10 years | 3.99 % |
SHORT TERM RATES
What can you see on this chart ?
This chart shows you the evolution of short term rates in the past and the future perspective if you opt for a variable rate to finance your property.
Yearly average : Euribor 3 months
Short term rates such as Euribor 3 months or 1 year are used by many French banks to buy money on the European Market. The variable rate you will get to finance your property is based on the Euribor 3 months or 1 year plus a mark up ranging from 1.2 to 1.6%. For example for a Euribor 3 months at 4.20% the variable interest rate of your mortgage would be ranging from 5.40% to 5.80%. Then it is rewieved according any variation of the Euribor 3 months.
LONG TERM RATES
What can you see on this chart ?
The chart shows you the trend of long term rates in the past and helps you comparing with short term rates.
Yearly average : OAT 10 years
The long term rate OAT 10 years is used by French Government to borrow money on a long term basis. It is the reference used by French banks to calculate fixed rates on 15 years. Then you add or deduct +/-0.15% per 5 years. Banks add a margin ranging from 0.10 to 0.40. For example for an OAT at 4.60%, the bank will offer you a 15 years fixed rate from 4.70 to 5%.