While corrosion rates slightly increased at 1Verse July 2022, credit rate increases continue this month with more and more loans being offered at more than 2% over 20 years.
Since the beginning of the year, the increase has reached nearly one point in some banks, and it has been forced to raise their rates in the context of higher refinancing conditions. A situation that could continue, especially after the announcements that the European Central Bank may make on July 21.
Price increases of up to 0.35% compared to June
In July, credit rates continued to rise according to the metrics received by mortgage brokers. Several national or regional banks have already raised their credit rates by 0.10 to 0.35% compared to June.
Since the beginning of 2022, the average rate increase has been 0.55%, but it has reached one point in some banks. For broker La Centrale de financement, the largest increase in credit rates for contracted loans was observed over 7 years, at +0.60% compared to January 2022.
Average rate can reach 1.70% over 20 years
According to Vousfinancer metrics, average rates are 1.40% over 15 years, 1.65% over 20 years, and 1.80% over 25 years. For Broker Empruntis, the rate is 1.50% over 15 years, 1.70% over 20 years, and 1.90% over 25 years. But the rate reserved for the best profiles remains the same at 1.10%.
Central Finance Center for its part invokes average rates of 1.39% over 15 years, 1.53% over 20 years, and 1.70% over 25 years.
According to this broker, a borrower with a loan of 180,000 euros over 20 years at 1.53% in July, compared to 0.94% in January, sees his monthly payments rising to 871.07 euros with a total cost of credit of 29,057 euros, compared to 17 euros, 520 in January, which is 65.77% more. This corresponds to an increase of 11,536 euros for a loan during the same period and in the same amount. Less favorable financing terms.
The bank offers a single interest rate of 2.10%
The regional bank even offers one rate regardless of the borrower’s profile, income or loan term: 2.10% over 15, 20 or 25 years.
YouFinance asserts that “an unprecedented situation is contextualized, with the surge in government borrowing rates – although they have been subsiding in recent days – and the increase in refinancing terms for banks whose margins are tight”.
What Empruntis found: Some banks assured him of “selling at a loss, forcing some out of the credit market temporarily.”
Insufficient increase in erosion rates
More and more banks are now posting rates above 2% over 20 years, rates that have not been published since 2017. During this period, the usury rate, which is the rate after which a bank is not entitled to lend money, was at 3.35%, compared to 2.57 % on July 1, 2022 for loans over 20 years.
“So far, high interest rates are not enough to allow banks to apply rates that would allow them to generate enough margin to encourage them to lend, although rates of around 2% on the part of the borrower do not necessarily act as a purchase restraint,” says Sandrine Allonier, Director of Studies and spokeswoman for Vousfinancer.
“As evidence, in 2017, average prices were at 1.75% and the real estate market is very dynamic, up 15% in one year with nearly 970,000 transactions in the old. Credit production is also at a record level. Except that at that time, it was Credit is less supervised.”
Price hikes are expected to continue
In the current context, with government borrowing rates at 1.8%, back to their level in 2014, when credit rates were above 3% and inflation was close to 6% in June (according to INSEE), rates should continue to rise in the future. weeks.
Especially since at its meeting on July 21, the European Central Bank is expected to raise key interest rates to curb inflation. This would affect interest rates as it would loan production.
But the good news according to Empruntis, “Banks remain voluntary and want to continue to win new customers. In this turbulent environment, well-equipped first-time buyers (meaning cost savings, little residual savings and counterparties) prefer these market conditions, because banks Willing to make efforts to seduce, cuts in file are always possible…”
More than 200,000 families have been kicked out of mortgage loans
According to the calculations of broker Pretto, 18% of the files funded in 2021 will not be bankable in the context of the market in June 2022, that is, 220,000 households.
Two reasons for that. Approximately 160,000 cases are no longer bankable as they are now because they exceed the maximum debt ratio of 35%. Nearly 60,000 files are no longer bankable because they have exceeded the attrition rate.