Mortgages: when borrowers rejoice at the increase in the rate of attrition!

Mortgages: when borrowers rejoice at the increase in the rate of attrition!

The increase in the ceiling interest rates for home loans from October 1, announced by the Banque de France, will unblock credit files that have so far exceeded the usurious rate. This is therefore paradoxically good news.

New usury rates or credit ceiling rates for borrowers will apply from 1eh next October. The increase will be 0.48% for mortgages over 20 years and 0.43% for those under 20 years, bringing the new caps to 3.05% and 3.03% respectively.

This increase should make it possible to remove the block on mortgage loans. But not necessarily for very long…

When you borrow, the bank cannot grant a loan if the all-inclusive interest rate (loan, insurance, application fees, etc.) is higher than the interest rate. This rate, set by the Banque de France every quarter, is calculated on the basis of the average effective rate charged by credit institutions plus one third. A few months ago, this wear rate was not a problem.

However, given the rapid rise in mortgage rates and the methods of calculating usurious rates, which are revised only every three months, the gap between the two has melted like snow in the sun, and many loan applications were rejected because they exceeded this usurious rate. .

So good or bad news?

This increase in rates will make it possible to unblock files “All borrowers whose files were rejected but for which the rates were close to the rates of usury will be able to resend their request”, confirms Guillaume Dubosq, director of commercial animation at Cafpi. And to warn: “Since we are on a long trend of rate hikes, they need to act fast!”. To overcome this problem, the brokers had requested that the method of calculating the attrition rate be revised, a request that has not been heard at the moment.

Rejoicing over the rise in interest rates is still surprising, because it means the price of mortgages is rising. But also and above all that certain loan files will be cancelled.

The rise in interest rates can quickly have an impact on the property market, because without a corresponding rise in wages, borrowers’ capacity falls. Either they will buy a smaller area, or the sellers will make an effort to make the sale happen, or the sale will no longer happen and the market will stall before it adjusts. The sensitivity of house prices to mortgage interest rates is high. Every 1 point increase in financing costs leads to a 7 to 8% decrease in property valuation.

The next adjustment of the usury rate will take place on 1 January.



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