Mortgage credit: slight increase in erosion rates at the beginning of 2022

Mortgage credit: slight increase in erosion rates at the beginning of 2022

Mortgage credit: slight increase in erosion rates at the beginning of 2022
Mortgage credit: slight increase in erosion rates at the beginning of 2022

Good news: At the beginning of the year, wear rates go up a bit. After declining throughout 2021 until reaching historically low rates, the usury threshold has been revised upwards by the Banque de France.

Calculation of usury threshold by the Bank of France

The interest rates are calculated every three months by the Banque de France and the maximum level beyond which the banking institution is not allowed to lend is set. Determined based on the annual average effective annual rate (APR) practiced by banks for different loan categories. Then this average is increased by a margin of one-third Create the maximum ceiling. If the APR is above this erosion limit, the balance cannot be granted.

Why can the usury rate penalize the most vulnerable borrowers?

Although the usury rate was originally intended to protect borrowers from abuse, some categories remain penalized. Indeed, in the context of low interest rates, It has become difficult for banks to give loans to the most vulnerable families.

These are higher-risk borrowers (the elderly or people with severe health risks, for example) whose rate exceeds the wear threshold, generally due to the weight of the insurance. We talk about the cost of risk, because the banking institution must compensate for the risk of default by applying a higher interest rate.

So, It is recommended to place the offers of banks in competition as well as offers of insurance institutions. Being accompanied by a specialized broker to achieve this makes it possible to be sure of finding the best real estate price, but also the cheapest insurance with the same minimum guarantees as the group contract offered by the lending bank.

Suitable interest rate for loans

After several successive drops, wear rates have shaken up and gone up slightly from 1Verse January 2022. At the end of 2021, usury rates are set at a historically low level of 2.88% for temporary loans, 2.43% for loans of less than 10 years, and 2.41% for loans of 20 years and more.

in detail, The usurious threshold now applied is 2.44% for mortgages of less than 20 years and remains the same for temporary loans and home loans of 20 years and more.

If the numbers don’t really upset the trend, it’s good news for the most vulnerable families who want to take out mortgage loans. With loan rates remaining low, This slight increase will make it possible to make more files bankable. To increase your chances of getting financing, there are subsidized loans like A loan at a zero interest rate makes it possible to finance up to 40% of the operation at a zero rate. The mortgage broker can guide the borrower on various possibilities to improve his financing and thus ensure that his client is bankable.

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