Le taux de croissance des crédits à l'habitat a atteint 6,8 % en mai, selon la Banque de France.

Mortgage credit: rates continue to rise relentlessly

Posted on Jul 6, 2022 at 12:48 pmUpdated Jul 6, 2022 at 7:37pm

Like cyclists in the Tour de France, mortgage rates are rising at full speed. According to Banque de France figures published on Wednesday, the average rates charged by banking institutions were 1.26% in May, compared to 1.19% in April. In June, they reached 1.33%, according to advanced estimates from the banking regulator.

This level is still historically low. Ten years ago, average rates exceeded 3%. Moreover, they remained below the inflation rate, which stood at 5.8% in June. But its rapid growth, which banks explain by the high costs of their financing, is feeding the fears of brokers and banks about the risks of a blockage in the credit market.

At their current level, the average rates are actually a bit closer to the usury rate, which corresponds to the maximum authorized rate for the loan. 1Verse July, that rate, set each quarter, increased to 2.43% to 2.60% for 10- to 20-year fixed-rate mortgages. For professionals, more and more files justify a higher rate and simply risk not being accepted.

Very high production level

However, at the moment, the Bank of France still does not see this phenomenon: the growth rate of housing loans reached 6.8% in May, to produce 27 billion euros. “Either the highest level reached in the last five years,” the foundation asserts. The Bank of France forecast raises production for June to 26.4 billion, a very high level.

“It is quite normal, Judge Pierre Chabon, founder of the online broker Brito. This production corresponds to the dismantling of projects that go back several months. The blockage associated with the rate of wear will not be visible until September. According to a study published by the broker, Tuesday, 18% of loans Granted in 2021 could not have been introduced this year due to the slow rise in interest rates, compared to the rate at which nominal rates are rising.

wear inertia rate

“We have deplored the discrepancy in the rate of erosion associated with the method of calculation for years, as Ludovic Husseau, President of the Court of Artemis, criticizes. The fact that it is computed every quarter compared to the previous quarter creates a real discrepancy.” All brokers share this position. They demand derogation from the rule in force by taking advantage of the “exceptional circumstances” stipulated in the texts.

But the Bank of France, like Percy, has so far preferred not to adopt this solution, stating that the rate of erosion is a tool to protect households from excessive indebtedness. Changing it, especially in times of economic turmoil, is out of the question for the authorities. Moreover, the Bank of France no longer hides its annoyance with brokers’ statements, which it deems unfounded.

However, the government is following the matter closely and wants to ensure that property remains largely accessible, including to low-income families. “We remain very vigilant and will study with great interest the evolution of rates in the coming months according to the evolving macroeconomic context,” a source close to the authorities noted last week.

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