Credit: Should we wave the warning flag of higher interest rates?

Credit: Should we wave the warning flag of higher interest rates?

52% of the French consider the situation unfavorable to borrow according to the poll. Quick judgment. Admittedly, mortgage rates are on the rise. But it remains very low.

The question on everyone’s mind: Could mortgage rates rise due to the war in Ukraine and the inflationary spikes that have emerged with the post-lockdown recovery?

“We are in a period of great excitement. The danger is in removing some of the households,” emphasizes Cecile Roquelure, Director of Empruntis Studies, the broker in mortgage credit.

safe haven

What fuels the surrounding pessimism regarding the placement of the stone? About 77% of French people think rates are going up and 88% consider their banks more demanding, confirms a March 9-10 poll for Artémis Courtage. 52% consider the situation unfavorable to borrowing, an increase of 11 points compared to September 2021. However, real estate remains a safe haven: pessimism is more pronounced regarding the economic situation in France in general (73%) and purchasing power due to inflationary pressures, a question that has become Crucial when prices rose 3.6% year-on-year in February, according to INSEE.

The ten-year OAT, which serves as the benchmark for mortgage rates, exceeded 0.80% on March 14 and reached 0.91% on March 21 (data from the Banque de France), compared to 0.19% on December 31, an increase of 0.7 points in less than three months.

But from here to imagine that the banks raise the borrowing rates in the same proportions, there is a step that we do not go beyond. Because the mortgage loan remains the product of the invitation and loyalty of the banks that accept a certain fee on their margins.

After 2021 at the bottom with almost unchanged average rates (1.06% in December on average according to Crédit Logement/CSA), the rise in loan rates remains moderate. ANIL noted an increase of 0.2 points between November 15 and February 15 for the best profiles of loans granted by its partners (Caisse d’Epargne, Crédit Agricole, Crédit Mutuel la Banque Postale, LCL). or borrowing rates between 0.80 and 1.45% over twenty years. The same note at Cafpi that it negotiated rates for its customers over twenty years from 0.80 to 1.40% in February.

The largest increase recorded in a regional bank scale at the beginning of the year is 0.50%, notes Julie Bache, general manager of Vousfinancer: “All banks have high productivity targets. Rate discounts remain possible for the best profiles.

Rates must continue to rise

Of course, these increases can happen again. “Some banks adjusted their schedules twice in March, and they are preparing us for another increase in April,” says Ludovic Huzieux, co-founder of brokerage Artémis. This can make borrowing more complicated for many candidates. Especially for first-time buyers who risk finding themselves facing thresholds set by the High Council for Financial Stability (HCSF), which set the term of loans at 25 years and the debt ratio (annual fee including borrower insurance on net paycheck by tax) at 35 %. This restricts candidate projects to a limited budget even if there are exceptions for 20% of files. On average, credits have a term of 22.1 years, and 95% of applications are for 25-year credits,” emphasizes Ludovic Hosio.

However, the requirements of the banks and the fear of tomorrow are already hampering the requests. There are fewer candidates for the loan. “If this goes on, the price hike could affect property prices, but we’re not there yet,” warned the co-founder of brokerage Artémis.

We have observed some form of exodus, but many families who are candidates to return to the green environment have not yet fulfilled their purchase plans. Many of them are still rented,” confirms Maille Bernier, director of communications at Meilleurtaux.

She also notes that “the applications for temporary loans are increasing because borrowers first seek their new property before selling the old one since it is easier to sell than to buy.”

All that remains is to complete his case as soon as possible to avoid the scissors effect from rising prices and property prices. You can try to earn on borrower insurance by delegating the insurance to companies other than your bank.

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