Do the banks win by providing more mortgages to households than to the government?

Role reversal. At the moment, the state has a very high debt ratio compared to households in terms of mortgage loans. At the same time, credit interest rates have skyrocketed in recent years. Furthermore, today it is extremely rare, if not impossible, to obtain a loan interest rate below the 2% threshold.

Extraordinary circumstances. The current situation is proving to be unsustainable for the banks. The latter have reworked their strategies for granting loans to households. Forced to revise rates upwards, gone are the days when rates were pegged at 1%. Still, this is last fall, a distant period on the borrowers’ timeline.

The sudden increase in mortgage interest has increased tenfold over a very short period. In line with the current fluctuations, it is inevitable to fear the decrease in the rate of wear. On the other hand, the state’s position is no better. He lends at an unusually high rate of interest, much more than individuals.

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An atypical situation

According to Maël Bernier, our communications director and spokesperson, no similar situation has been observed since 2006. At that time, the difference between mortgage rates and OATs was still acceptable, around 0.3%. Half of the credits were granted with a variable interest rate. These days, this difference is incredibly close to 1%. Despite a marked improvement, variable interest rates barely reach 5%.

The OAT flies away with incredible speed. This can lead to a situation never encountered before. It would be possible for the state to borrow at an interest rate that exceeds the permitted threshold. With 3.05% for wear percentage and 2.8% for OAT, there is a risk of rejection of the request. These conditions are rather paradoxical, since the usury rate does not concern the state.

This is shown by the analysis statistics in the field of real estate credit encounter serious problems. Over 10 years, the state borrows from a 3% rate for home purchases. For households, the rates are around 2.2%. Therefore, banks earn more by lending to the government, to the detriment of households. According to Maël Bernier, many of them have even stopped providing mortgage loans due to it is no longer beneficial.

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The credit interest rate rises disproportionately

The 20-year credit rate has doubled in one year only. For loans over 20 years, the average interest rate is around 2.2%. This must be considered without cost and insurance. Over 25 years, the rate is around 2.35%. According to brokers, the rate will reach 2.5% very soon. It is very rare to achieve a rate of 2%. It is only allocated to best records, in extraordinary measures.

On October 1, the attrition peaked at 3.05%. However, this variable risks changing in an instant. Despite the scheduled wear rate update on January 1, 2023, a deadlock situation is to be feared. This will be felt over the next few weeks. Sylvain Lefèvre, Chairman of the Central Finance Department, appoints the state as responsible for the current property crisis. Parallel to this blocking the wear rate does not allow renters to become owners.

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