The automatic increase on October 1 will only temporarily calm the heat around the usury rate, which sets the maximum threshold at which banks are allowed to lend. This time, it is the Minister of Housing who sits down to negotiate with the Banque de France.
The revaluation of the usury rate which took place from 1 October certainly allowed an increase in mortgage rates: but the new phase of raising rates by the European Central Bank weighed on banks’ margins: this observation is the Crdit Logement-CSA observatory, the benchmark in the sector, which draws it up in its October analysis for home loans. According to this observatory, whose averages relate to string files in banks during the month (1), the average rate for a loan over 25 years is 2.17%, bearing in mind that two-thirds of loans are granted for periods of more than 20 years and therefore close to 25 years, the maximum duration. Gold, wear rate for this loan term is 3.05%knowing that the wear rate is an all-inclusive rate which also includes borrower insurance or even the guarantee.
Real estate credit: new rise in rates in November, the limit of the wear rate
Despite the net automatic increase of October 1, a well-proportioned increase according to the Governor of the Banque de France, the room for maneuver is slim and, as the Crdit Logement-CSA observatory explains, this is being done to the detriment of modest borrowers. sidelined from access to home loans. Excerpts from the observatory’s analysis: Borrowers’ incomes are growing faster than in the past (…) The contraction of the banking offer has affected a more modest clientele (…) This development illustrates the difficulties of carrying out real estate projects fed by very many households, those whose personal contribution is now considered insufficient .
Real estate loan refused, scissor effect… 5 questions about the wear rate which changes on October 1st
Olivier Klein wants to change regularly with the Banque de France
For several weeks or even months, credit brokers have been at the forefront of this issue, to demand a relaxation of the usury rate. Small small, they seem to find relays at the highest level. The Minister of Housing Olivier Klein thus slipped at the end of October on BFM Business: We have to see if the method of calculating the rate of wear and tear every quarter is not too long, see if we can be more in tune with daily life and reality. A review every month? He announced the occasion of an upcoming meeting with Franois Villeroy de Galhau, Governor of the Banque de France. Meeting held this week.
We are vigilant about the issue of access to real estate credit
What was the outcome of the discussion? Mystery… The minister only delivered this laconic comment to the Figaro: We are vigilant about the issue of access to real estate credit, especially for first-time buyers.. He assures that he will change regularly in the coming months with Francois Villeroy de Galhau.
save up to 70% on your borrower insurance
But who really has control over the wear rate? The role of the Banque de France is obvious, since it is the bank that delivers the updated rates each quarter. But on the side of Bank of Francethe governor repeats that the institution is onlyapply existing rules. To change them, the Banque de France returns the ball to Bercy and parliamentarians… of action communicated in October. Negotiations are probably still ongoing…
The only certainty: if the rules do not change by the end of the year, the next increase in the usury threshold will occur automatically on January 1, 2023. Like that of October 1, the increase will necessarily be significant.
I’m annoyed… These French still deprived of home loans despite the increase in the rate of wear
(1) Crdit Logement-CSA statistics are based on the flow of loans having obtained a guarantee from the organization Crdit Logement (co-owned by the major French banks), which means that these files were initiated by borrowers several weeks ago. And that the funds will be released in 1, 2 or 3 months depending on the case.