In August and September, the number of mortgages taken out fell by around 35% over a year.
Taking out a home loan has become mission impossible. Interest rates are rising and banks are finding it difficult to grant loans. During the months of August and September, the number of home loan underwritings fell by almost 35% (34.7%) over a year, according to the latest figures from the CSA Housing Credit Observatory. An even more significant drop than in 2020, during the first lockdown.
From now on, the pandemic is no longer the main reason for the decline in mortgage loans. It is the economic situation that causes such a situation, specifies the Observatory credit housing CSA. We are witnessing one deterioration of the profitability of new loans “. In fact, a bank’s main purpose is not to underwrite mortgages at any cost. It is the financial health of customers that is at stake, reports Point. And the latter must be able to repay these loans.
A home loan is no longer profitable for a bank
The wear rate, which is a maximum rate imposed by the Banque de France on lending institutions, is reassessed every quarter. Over the past three months, it has prevented banks from raising interest rates in the face of runaway inflation. Therefore, a home loan is no longer profitable enough for a bank. This leads to a sharp increase in the number of rejected files.
Some banks choose the option of continuing to provide credit, but find themselves making concessions. Banks are now asking for a larger contribution (+13.8%) from people applying for a mortgage. In Paris, according to figures from the broker Cafpi, it is necessary to have a personal contribution of 150,000 euros to get a loan. Finally, the loan terms have also logically changed. More than 65% of the signed loans are granted for more than twenty years.