‘The situation is ridiculous’..these French are denied mortgages because of the wear rate

The usury rate, the maximum rate at which a bank can lend to an individual, is now 2.57% for loans of 20 years and more. As mortgage rates rise, many files find themselves caught in the scissors effect that puts their projects at risk. Four borrowers have told MoneyVox of their setbacks in the face of a rate that is “supposed to protect borrowers,” but is increasingly penalized.

“I might miss the drug I want, and I don’t know how long I’ll wait after that, and what the prices will look like at that time. I, even with an immune rate at 3%, I don’t care, I just want him to give me credit. Like many other French, Guillaume is now facing a dead end, hampered by the rate of wear and tear that prevents him from getting a mortgage.

As a reminder, the usury rate is the maximum legal rate that banks are not allowed to lend if they exceed it. Thus, the mortgage (including the nominal rate, insurance or various administrative fees) Today the rate should not exceed 2.57% For loans of 20 years and more or 2.60% for loans of less than 20 years.

The problem: It’s the way to calculate the wear rate, review it every three months, taking the previous quarter’s average rates increase by a third. It is now out of the realm of the rapid increase in mortgage rates. At 2.40% on April 1st, the rate of decrement increased +0.17% on July 1. At the same time, average credit rates over 20 years It decreased from 1.45% in April to 1.85% in JulyAccording to broker Meilleurtaux. By adding the borrower’s insurance, bank fees, and any brokerage fees, the equation becomes more complex.

“I was told no, without explanation”

For Guillaume, who wants to buy a property to be closer to his son and be able to have joint custody, it all started well: “I found a property that I liked, so I went to see my bank, Caisse Savings, that this old man rebooted 38, who works for Afnor, a certification body. All went well, I uploaded my validated file by the warranty agency. Everything went through the bank but at the last minute, upon checking into the headquarters, I was told no, without explanation. »

It’s a cold shower, especially since with a personal contribution of nearly 50% for a property worth €200,000, His file looks very bankable. “During the simulations, my maximum debt ratio was 21%, Guillaume swears. The first rate they gave me was 1.65%. Maybe it’s time for checks, prices have gone up and they can no longer accept this proposal? In the meantime, I saw a broker who told me that Caisse d’Epargne’s current rates were over 2.10%. »

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Then try to approach several banks: LCL, BNP Paribas, CIC … I was offered rates of 2.25%, not including insurance! I also inquired at Boursorama, which I also have an account with. They told me firsthand that they couldn’t do anything because their rates were already high compared to the rate of wear. Guillaume’s last hope, Crédit Agricole: ‘I was told that maybe we could do something, but it’s a last resort. The situation is complicated and the longer the file, the higher the rates. »

Denial of insurance authorization

If she was able to carry out her project, Sylvie measures how lucky she was, having experienced many disappointments. “Currently I am a renter, planning to buy a house,” explained the person who will retire from Airbus on November 1. When I found the property I wanted, I went to La Banque Postale, the bank of my life. We built the case, but It was finally rejected on the grounds that I had exceeded my attrition rate, and had not enough left to live. But after paying off the balance, I have 2,600 euros left! I didn’t even get past my debt ratio, I was at 19%! »

So you are using an intermediary. But here again, between the credit rate and the insurance rate, the banks contacted answered no, because the wear rate exceeded. Facing the banks, Selvi is trying to get around the problem by offering insurance mandates, with equal but less expensive formulas, to lower the rate. “What really surprised me is that Banks refuse to authorize insurance. I found two low priced insurances but they met the criteria. However, the latter did not want to take the delegations I proposed to them. »

A situation that deeply annoys Sylvie: “When you have a client for years trying to get a loan, as I do at La Banque Postale, we can try to set up something else! I had It decreased 35,000 euros, and the loan was about 111,400 euros. I could have put more but that wasn’t the problem, La Banque Postale totally wanted me to have their insurance. »

Save up to 70% On your borrower’s insurance

I finally decided to contact Crédit Mutuel, her employer’s bank, Airbus: “They did their best to get my file, and to make sure that the insurance cost me as little as possible. My credit rate is 1.45% and the insurance amount on my 15-year loan is around 7,000 euros. I will retire on the 1st of November, We will only keep the death insurance which will reduce the cost further. I’ve been really lucky to find this solution, it’s a huge relief to me. »

The extra cost can be expensive

Patrice was less fortunate. He has been working in Switzerland for 25 years, and hopes to return to France for his retirement, in a few months. So he decided to build a house on land he bought with his savings. After obtaining a building permit and obtaining various quotes from craftsmen, he contacted Credit Agricole, who offered him A loan of €220,000 at a nominal rate of 1.09% over 15 years In April 2022.

But the bank also wants Patrice to have his insurance within the banking institution. The problem: After having coronary bypass surgery in early 2020, he found himself having to pay high premiums. “After this insurance issue, I find myself To pay the insurance premium 2.5 times more than the interest payment (about 38,900 euros in insurance premiums for the borrower and 16,900 in interest payments). As a result, my APR is 3.16%, much more than the 2.60% currently authorized. As a result, I find myself with a floor on which I cannot build anything. »

Despite attempts with various insurance companies and a 25% debt ratio on this project, Patrice finds himself blocked by the wear rate due to his medical profile. His solution now: finance the project himself, without going through the bank: “The problem is that I will only have money when I retire, within a few months, and that this financing would have to be done by drawing a large amount of capital out of my pension fund, which would have the effect of lowering the pension I would have received. »

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Testimonies are far from reassuring John *. Long-term tenant, this guy under fifty is thinking about buying real estate soon: “Our landlord wants to sell, so I’m starting to find out, even if we have to wait for the trial period to end. My wife, who has changed her job,” explains. Still making an appointment with the broker Cafpi a few weeks ago to find out about his ability to borrow and the different steps to take here again, the letter is far from encouraging: “In June, he offered us At best the APR for our project is 2.60%. When the wear rate was 2.40%. Today, even if the rate of usury has risen slightly, credit rates are going up! »

With a contribution of 10% for a loan of about 300,000 euros, the first simulations showed a debt ratio of about 20%. An account holder at La Banque Postale, started the discussions: “La Banque Postale has offered us a rate of 1.90% over 23 years, while saying that things are changing so quickly that Within 15 days, this rate will not be applied. This does not include the borrower’s insurance. In the end, we actually slightly exceeded the wear rate in the simulation. All these factors lead us to a sticking point. In the end, the situation is really absurd: this rate of wear is supposed to protect the borrower but it turns against us. We haven’t even started our real estate project yet, but all the signs are already red. »

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