Fixed.  Loan: Credit rates continue to rise in April

Fixed. Loan: Credit rates continue to rise in April

Since the beginning of the year, all banks have raised their credit ratings by an average of 0.30 points. The debt ratio, or family effort ratio, has become a major brake. In the face of the increase in credit rates, it is already necessary to earn more so as not to exceed the limit set at 35%. The second quarter of 2022 is proving to be complex for those with a real estate project, at a time of the year when the real estate market has traditionally been the most dynamic.

Rate increase from 0.05 to 0.45%

Already in March, some banks sent several price tables during the month, under the influence of a sudden rise in the 10-year government borrowing rate *, which rose from 0% at the end of December 2021 to more than 1% at the beginning of April, that is, back to its level in April 2017.

In April, the upward trend in prices continued. Most banks, national or regional, estimate that the broker Vousfinancer has already raised it from 0.05 points to 0.45 points for one of them. The latter had already raised its rates by 0.30 points in March, bringing the total increase to 0.75 points. The brokerage firm Artémis reported an increase of between 0.2 and 0.4 points depending on the banking institution.

For its part, the broker Empruntis makes increments between 0.15 and 0.30 pips depending on the banks and durations. According to him, some banks maintain stable interest rates. “Either the banks have simultaneously made a significant increase and are maintaining their rates for the time being, or they would prefer a 10 to 15 centimeter point increase,” notes Cecile Rockellor, director of studies at Empruntis.

Rate between 1.35% and 1.45% over 20 years

According to Vousfinancer, prices quoted in April (excluding insurance) average 1.25% over 15 years, 1.45% over 20 years, and 1.65% over 25 years. The rates for the best profiles are also rising, while remaining attractive: 0.90% over 15 years, 1% over 20 years, and 1.25% over 25 years.

According to Empruntis, the rate also averages 1.25% over 15 years, but 1.35% over 20 years and 1.50% over 25 years. For 20 years, the rate reserved for the best profiles has remained, as in March, 0.90%.

All profiles are affected by the price hike, but in some banks this is more about lower quality (lower income) profiles for which we now sometimes offer rates above 2% over 20 and 25 years, Youfinance points out. The reasons given by the banks: inflation, the end of the compliant pricing policies of central banks and the Ukrainian conflict.

Effect on the debt ratio

Due to the increase in monthly loan payments resulting from higher borrowing rates, for example 300,000 euros over 20 years, it is necessary to earn 200 euros more per month in some banks in order to compensate for the higher rates of 0.50 points while respecting the maximum debt limit of 35%.

In recent weeks, loan denials have been linked to the rate of debt, but also to the rate of usury, a rate beyond which a bank is prohibited from lending money. The second quarter of 2022 is likely to be complex for borrowers.

* Serves as a benchmark for personal loan rates

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