With the continued rise in bond yields, real estate loans are following suit, and at a particularly sustained pace.
At the beginning of the month, credit brokers reported further increases in borrowing rates of around 0.1% to 0.3% observed in the latest updates of banks’ scales.
“ While some are only applied to certain profiles, to the lowest incomes, others concern all profilesnotes the broker Vousfinancer in a note released this week. However, there is one exception: a national bank which had raised its rates significantly in recent weeks chose to grant a 0.10% drop in May. »
Not enough to slow down the general trend, however: in total since the beginning of 2022, the average increases have been 0.45%, but in some banks they have reached 0.70 or 0.75%, “which represents an increase in the monthly payment of €70 for a loan of €200,000 over 20 years “, underlines the broker. A record in just 5 months…
1.5% for a mortgage of 20 years on average
According to Vousfinancer, the average rates are increasing to 1.30% over 15 years, 1.50% over 20 years and 1.70% over 25 years. The rates for the best profiles are also rising while remaining attractive despite everything: 0.90% over 15 years, 1.1% over 20 years and 1.25% over 25 years.
Problem: despite these increases, usury rates, ceiling rates (all inclusive: with fees and insurance) beyond which banks are not allowed to lend, will not increase before July 1.
With wear rates frozen, credit conditions are getting tougher
Because between rising borrowing rates and unchanged wear rates, the conditions for accepting certain files from real estate buyers are getting tougher.
For the most “solid” borrower profiles, the impact would still be relatively limited, as banks still have a lot of recourse to attractive offers, even if it is to the detriment of their margin, to continue to attract the best customers. , we are assured at Pretto. For example, an online bank has agreed to deviate from its grid to attract a good profile with a rate of less than 1% over 25 years, reports the broker.
But the most fragile customers, and all those who are offered higher than average borrowing rates (employees in sectors with poor prospects, employees on fixed-term contracts, self-employed, expensive borrower insurance profiles, multi-owners accumulating loans, etc.) , have indeed less margin not to exceed the rate of wear. This is called the “scissors effect”.
“To achieve their credit production objectives, some banks are trying to contain the rise in rates compared to what it should be in the current context, notes Sandrine Allonier, head of studies at Vousfinancer, but many borrowers are still heavily penalized. »
According to Pretto, the number of files presented to banks exceeding this rate of wear has exploded since the beginning of the year. Among its customers, it has gone from 4.3% in 2021 to 15.2% since the start of the year, and even to 24% in April.
Other increases to be expected
The revision of the usury rate this summer could give a little more air to borrowers. But it is not certain that this is changing at the same pace as borrowing rates, the rise in which promises to accelerate further: the rise in the US Federal Reserve’s fed funds rate this week (+0.5 points) and the prospect that the ECB will follow suit this summer, that of mortgage rates is not ready to stop…
Its intensity will depend on bond yields of course, but also on the credit production targets of banking establishments.