While banks have more trouble making a profit on home loans, the conditions for granting them are getting tougher for borrowers. More than ever, the latter must present residual savings to be granted a loan on the best terms, according to several brokers.
At the beginning of February, the Banque de France, although not quick to highlight the difficulties of mortgage loans, published clear figures: while new housing loans weighed in at 23.7 billion in January 2022, they only represented 14.4 billion euros in January 2023 (renegotiation included).
A tension which is partly explained by the increase in the cost of credit for banks. While these last face a rise in 10-year OATs (The French government borrowing rate indicator is a benchmark for changes in the credit market, Ed.), which rose from 0.64% in February 2022 to 2.63% on February 3, 2023, they could not so far pass on this increase. Indeed, the rate of wear, the maximum all-inclusive rate above which a loan cannot be offered, blocked the lending establishments. As a result, many banks preferred to stop making real estate loans while waiting for better days.
Up to one year of precautionary savings required
The increase in the rate of wear, fixed in February at 3.79% for home loans with a term of 20 years and more, made it possible to reopen the floodgates of credit. In dribs and drabs, however: the files of applicants for credit are thus scrutinized by the banks. Good account management, stable income and a personal contribution of at least 10% are still prerequisites for obtaining a mortgage today.
But brokers have been putting forward for a few weeks a new point to which banks are focusing: residual savings after the project. Clearly, a borrower should, in addition to his contribution, have a certain additional amount.
For Mal Bernier, communication director of the broker Meilleurtaux, this does not seem like an obligation. However, having a residual savings is what will allow a file to go below 3% today. Having savings after the project would therefore be the key to benefiting from a more attractive credit rate. A good will of the banks which is easily explained: the borrower will need a banking product to invest this savingswhich will make money for the bank.
Approximately 20% to 30% of the project amount in residual savings
But then, what is the amount expected by the banks? Ideally, the borrower must have, in addition to his personal contribution of 10%, about 20% to 30% of the project in residual savings. For example, someone who takes out a loan of 200,000 euros and who has 40,000 to 60,000 euros in savings after the project is considered a good file today, reveals Mal Bernier.
But in some banks, savings after the project is even compulsory. There are banks which, beyond the preferential rate, have made savings a condition for granting credit, assures Laura Martino, director of banking partnerships at the broker Cafpi. In a context of increases in daily and energy expenses, some banks ask for up to a year of monthly installments of credit in precautionary savings in addition to the deposit requested.
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Thus, banks would like to ensure that borrowers can cope with an increase in their charges, for example. In this case, the idea is more to protect against risk than to make a profit on savings products. Often, the precautionary savings do not need to be placed on a support, it is there to cover a potential risk, it must therefore be mobilized and is most often placed on a Livret A, confirms Laura Martino.
A study of the file on a case-by-case basis
This desire to only offer mortgages to borrowers with a comfortable mattress can also be explained by the increase in the cost of the resource. The subject of savings is becoming more and more important for banks, because they are currently subject to liquidity constraints, explains Laura Martino. This was not the case until last year, when there was no problem obtaining financing at a lower cost on the markets. Savings provided by customers are now becoming a point of attention for banks.
Statements not confirmed by the main concerned. On the side of LCL as well as Crédit Agricole, for example, we claim not to be aware of this situation, explaining that the granting of a mortgage depends in any case on very many criteria and is done on a case-by-case basis after study folder.
There would therefore be no instructions to favor customers with substantial savings after the project. A person questioned confirms all the same that the residual savings proves to the bank which studies your file a certain capacity to set aside, which can be reassuring at the time of lending money.
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