Real estate loan: loan conditions remain favorable until the end of the year

 

According to a study by the Sentro Bank, banks do not plan to tighten the conditions for granting a mortgage and interest rates will remain low.

According to a study by the Sentro Bank, banks do not plan to tighten the conditions for granting a mortgage and interest rates will remain low.

Advantageous rates

Advantageous rates

The Sentro Bank (SB) confirms in its quarterly study on bank credit that borrowing conditions will remain favorable until the end of the year. Banks continue to finance themselves at favorable rates from the SB and some customers are still expected to benefit. Indeed, some targeted profiles will still have access to favorable borrowing conditions, unlike other riskier profiles. Nevertheless, France is one of the countries where margins on risky loans have increased.

However, according to some brokers, rates would have fallen only on the priority targets of banks, such as young first-time buyers or so-called “high-end” profiles. It is, therefore, possible to benefit from significant discounts if the contribution is greater than 20% of the amount of the property or if the income is domiciled.

Borrowing times up

Borrowing times up

The duration of loans continues to grow. Indeed, in the third quarter of 2018, this duration reaches 225 months on average is a little less than 19 years. This represents 6 months more than at the beginning of the year and 18 months since the beginning of 2014. In September, 38.2% of the credits were over 25 years and over and 68.5% over 20 years and over. Thus, the historical record of the second half of 2017 is about to be beaten.

However, the announcement of the SB may displease the council which has recently warned of the risks of deterioration of the margins of banks and indebtedness of the non-financial private sector. Indeed, the council has doubts about the risk for individuals to get into debt significantly and banks that soften their conditions of granting especially if the solvency of demand retreats. The level of risks remains at the moment contained, but requires increased vigilance on credit conditions, especially since the commercial practices of banks can make them a product of appeal.