While we have been borrowing for almost nothing up to now, the end of 2022 is dealing a hard blow for property candidates... and in this regard, 2023 does not look any better!

Between the closing of the credit tap and a blocking rate of wear and tear, obtaining a mortgage has become particularly complicated, while the borrowing capacity of buyers is reduced as interest rates rise.

Nothing works anymore!

Fewer credits granted

The strong tendency of the French people to save in recent years has made it possible to amass colossal sums that it was hitherto more profitable for banks to invest in the form of loans, rather than placing them in low-remunerated portfolios.

Thus, “there was record loan production in the first four months of 2022 and some establishments reached their annual objectives in the summer”, explains Sandrine Allonier, spokesperson for the brokerage network Vousfinancer.

At the same time, the sharp rise in interest rates on Treasury bills (0.30% in January to 2.80% in November), which serve as a benchmark for the sector, and that in interest rates on investments reversed the conditions of the market.

Logical consequence: “Today, it is no longer profitable for banks to grant mortgages, analyzes Sandrine Allonier.

It is more interesting for them to invest this money.

As a result, institutions prefer not to lend, rather than lending at a loss”.

As Maël Bernier, spokesperson for the MeilleurTaux brokerage network, confirms, "some banks post almost usurious rates, knowing that no file will pass, while others announce outright that they will no longer grant any credit. real estate until the situation stabilizes”.

The rate of wear, adjustment variable

This blocking situation stems from the fact that the banks cannot raise their interest rates as they see fit.

Indeed, in order to protect consumers against prohibitive rates, the law provides for a usury rate, in other words a ceiling above which it is illegal to borrow.

And beware, it is here the annual percentage rate (APR) including all costs, including insurance, which counts.

However, even if the Banque de France updates the usury rate every 3 months according to the rates charged by banking establishments, all increased by one third, this ceiling currently remains below market needs.

On October 1, it rose to 3.05% for mortgages over 20 years old.

Except that a month later, most banks show interest rates of 2.30 to 2.40% over this period, which must be added borrower insurance.

Result: even with a good profile, it does not pass.

Towards a market downturn

The solution ?

Unfortunately, there is nothing obvious about it.

The mechanical increase in the usury rate each quarter should give some leeway in the granting of files, but as long as it does not allow banks to lend at profitable rates for them, it will not be enough to really reopen the credit tap.

In addition, each rate hike reduces the borrowing capacity of property candidates by the same amount, while property prices have soared since the Covid... A "double penalty for buyers", which should cause the market to contract by reducing demand, according to Sandrine Allonier.

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An observation shared by Maël Bernier who adds: “The number of sellers should also drop since those who bought at 1% a few years ago will wait to sell in view of the current borrowing conditions”.

And to conclude: “We expect a market downturn and a significant drop in transactions in 2023”.

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Tips to use

Faced with a hostile context, several strings help to obtain a loan.

Some banks offer subsidized loans to first-time buyers, in order to build their loyalty.

According to Sandrine Allonier, "you can for example obtain €20 or €30,000 at 0.5% or 1% over 15 or 20 years, in addition to the traditional loan, which makes it possible to reduce the total cost of your loan and the level of APR ".

Similarly, the bank will be more inclined to make a move on the rate if you repatriate not only your income to its fold, but also your savings and why not your home insurance.

Finally, you can play on the borrower insurance rate: if you buy two, you can thus insure the one with the highest income at 60% and the other at 40% while you obtain your loan.

But this should only be a temporary strategy!

As soon as you obtain this sesame, you will have to raise your cover as quickly as possible (the wear rate no longer applies) since it aims to cover your monthly payments in the event of a major incident (death, disability, even unemployment for the most complete).

Since September 1, 2022, you can indeed delegate insurance at any time.

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