Unsurprisingly, mortgage lending rates continued to climb at the start of August, despite the fall in the 10-year OAT, one of the indices that brought rain and shine to mortgage lending. For borrowers, the noose is tightening in this often inauspicious holiday period to move files forward.
We know: summer, which rhymes with holidays for a majority of French people, is not an ideal period for mortgage loans. We will have few bars, people are on vacation, explains Sandrine Allonier, spokesperson for Vousfinancer. Rather, in the second half of July, we received communications from the banks explaining to us what profile of borrowers they were looking for. The cards will rather be reshuffled in September.
The best profiles are no longer spared
If the banks, which have to operate with reduced staff, therefore tend to tighten the screws a little in normal times, the current conditions do not help. Admittedly, the 10-year OAT – an indicator of French State borrowing rates, which is a benchmark index for developments in the credit market in France – fell back to 1.61% at the end of July, after having exceeded 2.35% mid-June, real estate loan rates continued to rise. Thus, while it was possible to borrow at 1.57% over 20 years in July, borrowers who still have access to it are now being offered, at best, 1.76% at the start of the month. August.
And very good profiles are not spared. According to Cafpi, the rates displayed for premium customers are now 1.30% over 15 years against 0.90% last month (+ 40 cents), 1.45% over 20 years against 1.10% in July (+ 35 cents) and 1.55% over 25 years against 1.30% over 25 years (+ 25 cents).
Average rates in banks at the beginning of August
- On 15 years old: 1.48% on average according to Cafpi; 1.64% according to Pretto; 1.69% for Meilleurtaux.
- On 20 years: 1.58% according to Cafpi; 1.76% according to Pretto; 1.85% for Meilleurtaux.
- On 25 years: 1.75% on average according to Cafpi; 1.88% according to Pretto; 2% for Meilleurtaux.
Average rates noted by the brokerage networks, based on the scales provided by the banks. They do not take into account the cost of borrower insurance.
Unlike more fragile profiles, high-potential profiles can therefore still hope to get out of the game, as explained in a press release by Pierre Chapon, president of the broker Pretto: At the end of July, the rates are very difficult to negotiate. High potential profiles allowing the bank to envisage a full banking relationship are privileged… a fortiori, if they borrow modest amounts (300,000 to 400,000 euros maximum) which weigh less on the banks’ balance sheets.
For less attractive files, it will still be necessary to wait, hoping that the banks will relaunch their conquest of customers at the start of the school year: We recommend that borrowers take advantage of the month of August to work on their file and solidify it with the aim of taking advantage in September of the opportunities that are sure to arise given the acquisition targets that certain banks have set themselves, confirms Pierre Chapon again.
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A gradual freeze on real estate loans
All credit indicators are red, alert Olivier Lendrevie, president of the broker Cafpi. Rates continue their rapid rise and the amount of loans granted is down (-12.5% in the second quarter, year on year), according to the latest figures from Credit Logement. On the ground, we are seeing a gradual freeze in real estate loans.
Unfortunately, even at the start of the school year, the usury rate (maximum rate at which a bank is authorized to lend) should continue to block borrowers. Olivier Lendrevie reports that one out of two files has experienced difficulties since the beginning of July because of the attrition rate, set at 2.57% for loans over 20 years and more (2.60% for shorter terms) .
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