The maximum rate at which a bank can lend will be increased by 0.15% to 0.2% while the credit rate will increase by 0.3% on average. The scissors effect excludes thousands of borrowers from the market.
It’s a little breath of fresh air that financial authorities provide to mortgage borrowers. But will this be enough to ease the credit market? Not sure. Currently, the credit rate continues to rise (1.51% over 25 years versus 1.09% at the beginning of 2022). At the same time, the maximum rate at which banks can lend money to individuals – the usury rate – is dropping (2.4% versus 2.67% at the beginning of 2021). This leads to the “scissors effect” which, according to brokers, prevents several thousand borrowers from obtaining credit.
Like every three months, this wear rate is updated. It will be on Friday 1 July and it is expected to rise. The increase that borrowers hope will be sufficient to offset the increase in credit rates. There will be nothing a priori. The wear rate will be raised from 0.15% to 0.2%, according to the Bank of France, citing Le Parisien-Aujourd’hui-en-France. ”
Interest rate cap legislation has been put in place to avoid excessive borrowing rates and thus protect borrowers
He explains that the Bank of France justifies not increasing the rate of erosion further.
Increase in upcoming loan rejections
Problem: This guarantee appears to be turning against borrowers. Currently at 2.4%, this rate would be between 2.55% and 2.6% for loans of 20 years or more, which are the most common. However, over 20 years, the average rate is 1.5% and 1.75% over 25 years. If we add the additional costs (warranty and file) and especially the insurance price, the total price can quickly exceed the maximum rate. This prevents the borrower from obtaining a mortgage. Because the more risky your profile (smoker, risky sport, senior borrower, etc.), the higher the insurance rate. ”
At this point, we don’t see any crowding effect
(credits denied, editor’s note)
associated with these ceiling rates.
says the Bank of France.
On the part of brokers, the disappointment is necessarily great. ”
This increase in the rate of wear is very insufficient. Younger ones are well “protected” from access to credit. Skip your turn and stay rented! We are watching you!
‘, Maël Bernier, of Meilleurtaux reacts with a touch of humor. For Olivier Lindrey, ‘
Evictions will increase
We have received the price tables for the month of July. Its 0.3% increase on average is much higher than that expected for the wear rate
‘ Chief Cavbe notes.