Because of him, 1 mortgage out of 5 in France is refused. “for him”? wear rate. This word certainly means nothing to you, unless you have a real estate project in mind and you have spoken about it with your banker. Because this somewhat barbaric term often comes up in the mouths of credit professionals. This is the credit rate (with insurance, file and guarantee costs) beyond which banks cannot grant a loan. However, this rate continues to fall – it is currently 2.4% against 2.67% at the start of 2021 – while the average credit rate is rising at the same time (1.51% over 25 years against 1.09% at the start of 2021). 2022).
Result: the gap between the two curves is reduced (see graph below). In this case, it’s about 0.9% for a 25-year loan. Comfortable difference a priori. Problem: The rate of 1.51% does not take into account the costs (deposit, file, etc.) and especially the insurance rate. However, the riskier your profile – you practice a risky sport, you smoke, you are old… – the higher the insurance premium.
Also Read – Real estate credit: What is the rate of erosion preventing thousands of files?
And in these cases, the gap between the total credit rate and the erosion rate is quickly filled or even exceeded. This forces the bank to reject the loan application. The scissor effect locks in thousands of borrowers. “Its peak! This usury rate is supposed to protect borrowers and is counterproductive. It’s the kind of handrail that goes crazy“, analyzes Olivier Lindrey, president of CAFBI. All profiles are concerned, even the wealthiest.
Windsurfing, smoking, very old
This is the case of a 48-year-old couple living in Strasbourg who wants to borrow €207,000 over 15 years. Although they together earn more than 93,000 euros per year and have contributed for 40 years, the overall rate was 2.49%. Blame it on an insurance rate of 0.84%! the reason? These borrowers smoke. Same sentence for a 36 year old for the first time, who lives in Amiens and wants to take out a loan of 210 thousand euros over 25 years. Once again his salary is comfortable (32 thousand euros per year) and his big contribution (14 thousand euros). But his insurance rate is 0.63%. default? Surfing is a very risky sport. The fatal accident which claimed the life of a 31-year-old Parisian practicing sport, after sudden winds blew over Villiers-sur-Mer (Calvados), is proof of this.
Also Read – How to get the right home loan based on your profile
Finally, a 51-year-old investor, residing in Nantes, also exceeded the legal ceiling due to the high credit rate (1.6% over 15 years) and insurance (0.7%). the reason? his age. Result: their overall rate of 2.5% (against 2.4% for the maximum legal rate) for a loan of €130,000 over 15 years. However, she earns around €47,000 a year and her contribution is €30,000. Note that for these three examples, the borrowers used another bank for their insurance rate. Despite this, it is high.
Also Read – Mortgage rates at 2%, it is indeed possible
Percy announcement this week
Brokers are demanding an urgent reform of the method of calculating the erosion rate to reflect the reality of the market. “The current formula leads to a delay of 6 to 9 months compared to the rates already chargedOlivier Lindrey regrets.We ask for a wear rate of 3.5% and not more than 2.40% so we do not exclude young or older profiles, over 45 years oldLudovic Hozio, President of the Court of Artemis who also claimsFlat-rate insurance at 0.4% for all or exclude this insurance in the calculation of the credit rate».
Percy worksWith the Banque de France, the French Banking Union and consumer associationsTo find a solution, an announcement will be madeThis week“, entrusted to the Ministry of Economy figaro. The situation is more urgent, according to brokers, more and more banks are voluntarily offering high rates to ensure that the file does not go through. “In other words, they slow down or even stop the production of real estate loans because it is no longer profitable for them.“Sliding Maël Bernier, from Meilleurtaux”.