Infotech Credit rates are soaring, and it shouldn’t stop

Credit rates are soaring, and it shouldn’t stop

All about real estate in Paris and Ile-de-France

Find our file to know the latest trends and real estate prices in Paris − from the trendiest neighborhoods to those where to find good deals − and in each department of Ile-de-France, as well as the state of the market rental and the latest information on the energy performance diagnosis and the level of interest rates.

The science fiction scenario has become reality. Neither buyers, nor banks, nor brokers would have dared to imagine, at the end of 2021, that loan rates would double, reaching an average of 2.05% over 20 years at the national level at the beginning of November. The situation is even more tense in Ile-de-France: “The scales of the banks are on average at 2.40%. This level reflects the fact that some establishments that have had a very good first semester no longer wish to lend at this time,” notes Cécile Roquelaure, director of studies at the broker Empruntis. The Caisse d’Epargne Ile-de-France even displays a scale of 2.60% over all loan durations. “The gap between establishments is particularly large, with grids ranging from 1.80% to 2.70% over 20 years”, completes Sandrine Allonier, spokesperson for Vousfinancer.

The sequel after the ad

What will happen in the next few months? The economic and monetary context pleads for the continuation of the increase in the cost of credit. The rate of the benchmark government bond, the 10-year OAT, is thus flirting with 2.50%, against 0.20% a year ago. Moreover, the European Central Bank should continue to raise its key rates to fight inflation, after already three hikes since July. “The rates of real estate loans could reach 2.50% in the first quarter of 2023, that is to say the same level as in 2016”, says Sandrine Allonier.

These increases are difficult for borrowers to absorb, because they translate into an increase in monthly payments, and risk making them exceed the 35% debt threshold. In addition, many candidates for the acquisition simply cannot find financing, because their file does not fall within the limits of the rate of wear, this ceiling beyond which banks cannot grant credit. However, this has risen to 3.05% over 20 years and more since the 1er October, compared to 2.57% in the previous quarter. But Ludovic Huzieux, the co-founder of Artémis Courtage, clarifies:

“The respite provided by the rise in the usury rate was short-lived, as banks took the opportunity to raise rates by 30 basis points in October. »

One of the solutions for obtaining credit under these conditions is to increase your contribution. “In Ile-de-France, first-time buyers often benefit from family solidarity: donations from parents or grandparents allow them to inflate their contribution, therefore to borrow less”, confirms Ludovic Huzieux. “The average contribution reaches €80,000 for first-time buyers, i.e. 21% of the amount of the operation”, indicates for her part Cécile Roquelaure, who notes that only 4% of the files financed have no contribution in Ile-de-France. An opportunity reserved for young workers with a promising career and whose income is growing rapidly.

“Banks fear a market downturn. If prices fall and it is imperative to resell, for example in the event of divorce, it is not possible that the sale price will not cover all of the credit in progress”, she summarizes. However, without contribution, this risk can become reality.

Small loans at low prices

Some banks offer small loans at very low rates (0 to 0.5%) in addition to a conventional line of credit. “There are some in particular to finance the acquisition of a property that consumes little energy, whose energy performance diagnosis (DPE) is A, B or C”, says Sandrine Allonier, spokesperson for Vousfinancer. otherwise, “mutual banks occasionally offer 0% loans on a few thousand euros reserved for first-time buyers. You have to be on the lookout to fire any wood,” adds Ludovic Huzieux, co-founder of Artémis Courtage. It should also be noted that the PTZ is extended until the end of 2023.

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