Mortgage Credit: These Rates Are Still Beneficial, Reserved Only For The Best Files, Are They Yours?

Mortgage Credit: These Rates Are Still Beneficial, Reserved Only For The Best Files, Are They Yours?

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New regulations in place since the beginning of January 2022 are pushing banks to select only the best borrowers by offering ever lower rates, up to 0.8% compared to the average!

Mortgage rates rise

Banks are laying the red carpet for the best borrowers. This is the complete contradiction of the current situation. While the market interest rates are rising, the banks have entered into competition for the best files, and made new concessions on the rates offered. New regulations mandating that 80% of credits awarded comply with the rules in effect. Therefore, the beginning of the year will now be reserved for the best files of the year, as expected when this rule is applied.

rates less than 2%

Since the beginning of 2022, the best profiles have been offered at prices below 1.5%, regardless of duration. However, mortgage rates are generally stable compared to December 2021, and only a slight decline has been observed in some institutions. Thus notes Cécile Roquelaure, Director of Mediator Empruntis Studies: “ It’s not yet time for a rate hike or an aggressive tightening of benchmarks, rejoices Cecile Rockellor, director of studies at broker Empruntis. Banks want to attract borrowers thanks to very favorable metrics and to achieve the ambitious goals set for this year. »

Thus, the average offered rates remain constant at 1% over 15 years, 1.15% over 20 years and 1.40% over 25 years with significant variations depending on profiles, with the most desirable rates and which can always be funded at the lowest From 1% over all periods: 0.55% over 15 years, 0.75% over 20 years, 0.95% over 25 years.

Mortgage Credit Calculation (Monthly Payments, Credit Cost, Annual Percentage, Insurance, etc.)

Mortgage Credit Calculation (Monthly Payments, Credit Cost, Annual Percentage, Insurance, etc.)
Mortgage Calculation: Monthly Payment, Total Cost of Credit, APR © FranceTransactions.com/stock.adobe.com
A simple calculator to calculate your monthly payments, the savings made by renegotiating your mortgage, the total cost of your credit, the annual interest rate, the cost of insurance, etc.

Respect the new rules

At the beginning of the year, the banks had not yet developed their own rate strategy, but were already trying to win over customers in order to achieve ambitious loan production targets, equivalent to 2021. One of the challenges facing them is compliance with the recommendations of the HCSF, which since January 1 has become a legally binding standard, which can be It thus becomes a real obstacle to accessing credit, particularly for investors…

Banks apply rate discounts on a case by case basis

In the current context, some banks no longer send monthly schedules, but Prefer to apply price cuts on a case by case basis, based on income, preferably high or scalable, the contribution of borrowers up to 0.80 points! This is a way for them to improve their customer acquisition strategy and allocate the margin on the mortgage loan according to the estimated future profitability of the customer… Analyzes Sandrine Allnier, Director of Studies at Vousfinancer.

First stay first and foremost

Banks, more than ever before, are using major means to attract the best customers. Especially those who are looking to acquire their primary residence, while the treatment of investors or second home buyers is less favorable.

This year, most banks have loan production targets equivalent to 2021, a record year with production of 270 billion euros in loans compared to 253 billion in 2020. Therefore, banks must maintain an aggressive pricing strategy in the context of strong competition between banks. , respecting the HCSF Recommendation which has become a legally binding standard Analyze Julie Baschett, Managing Director of Vousfinancer.

A typical profile of a good profile

Are you ticking all the boxes to get the best mortgage offer?

  • Acquisition of a main residenceAnd the
  • A married couple on perpetual contracts, perfectly married,
  • Professional activity close to the property,
  • No other credit in progress,
  • Significant income (<35% debt ratio),
  • Significant contribution, at least 20%.

Thus, a young couple with a combined income of 6000 euros in theory can borrow about 523,000 euros over twenty-five years, based on a nominal rate of 0.90% and an insurance rate of 0.35%.

Punishment of investors

Since January 1, the recommendation of the Supreme Council for Financial Stability not to exceed 35% of debt and 25 years of credit term has become a legally binding standard, which has encouraged banks to closely monitor their indicators and distribute their loan production in order to respect the 20% margin of flexibility. Already in December, one of the banks decided to increase its volume for clients outside the HCSF standard, exceeding 35% of the debt. Thus, even if you continue to study these files, the awarded rate will be 0.10 to 0.20 points higher depending on the profile of the borrower, in order to limit the financing share to more than 35%..or anticipate and offset any penalties in the event of non-compliance with a margin of 20 %.

Average Fixed Market Rates for Home Loans – Data updated as of 05/05/2022
credit terms maximum rate average prices lowest rate.
7 years 1.20% 1.10% 1.03%
10 years 1.35% 1.25% 1.10%
15 years 2.02% 1.60% 1.30%
20 years 2.40% 1.85% 1.60%
25 years 2.51% 1.80% 1.70%
update in 05/05/2022

. Prices do not include compulsory and optional insurance. Average market rates (with a contribution of 20%), calculated on data from mortgage brokers. Indicative data only.

But if banks generally respect the margin of flexibility granted by the SWF in 2021 (with a share of loans non-compliant with the recommendation reaching 20.9% in July), then the distribution and allocation of that margin could be problematic for him. Some borrowers. In fact, the 20% margin should be reserved at 80% for the main residence buyers, leaving only 20% of the 20% to investors, or only 4% of the banks’ total output. However, in July, the share of non-compliant production excluding the main residence was still 5.2% on average, certainly much more for some banks, especially at the end of the year when there is a higher share of buyers than investors. But according to the latest numbers from Century 21,30.2% of buyers were investors in 2021 . In the current context of legally binding standards, one wonders how this stake can’t go down in 2022, when most already own a home with credit sometimes in progress, which necessarily affects their debt. ” Même si certaines banques, afin de rendre les règles de calcul de l’endettement plus favorable aux investisseurs, prennent désormais en compte les revenus fonciers, perçus et à percevoir commission, à 90 % au lieu de 70 %, et les revenus variables à 90 % au lieu de 50%, cela risque de ne pas suffire pour permettre à certains investisseurs potentiels de respecter le taux d’endettement de 35 % et donc aux banques de rester dans les clous en les finançant, avec un refus de With the key…

Sandrine Alonier concludes.

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