The attrition rate is temporarily re-evaluated every month to unblock loan requests

The Banque de France is set to raise the amortization rate monthly instead of quarterly, the ceiling lending rate for mortgage loans meant to protect buyers from abusive terms, an “exceptional” measure to “make the market more fluid”. This rate covers all the costs of the home loan: the loan rate charged by the bank, any brokerage commission, the borrower’s insurance.

Monthly payment “supported” by the Mayor

For several months, interest rates have been rising against the background of the main rates of the European Central Bank and faster than the interest rate, which, according to financial experts, makes it difficult for individuals to access credit. real estate. The increase in the interest rate gives the market a breath of fresh air: it allows banks to give more expensive loans, but also allows the cost of the loan to be bought together (broker’s commission, borrower’s insurance, etc.). to consider without exceeding the legal limit. This ultimately allows more loan application files to be accepted.

It is currently calculated quarterly by the Banque de France, which takes into account average rates increased by one-third in the past three months. Director-General Marie-Laure Barut-Etherington explained that the law allows for a “temporary deviation from the calculation rule” in “exceptional circumstances” and “something that is currently being considered and discussed”. Banque de France Statistics Department assistant during the conference.

The monthly payment is being “supported” by Economy Minister Bruno Le Maire so that the ceiling can adjust more quickly to market prices, Bercy said. The “technical adjustment” will allow the rate to be recalculated every month, taking into account the rates applied in the previous three months, with the aim of better distributing increases and “liquidating credit production”. Mrs Gunpowder-Etherington.

Change in calculation method

“Instead of doing this increase in one big step at the end of the quarter, we’re going to take three small steps,” Governor Francois Villeroy de Galhau concluded in his speech to the Senate Finance Committee on Wednesday. The Ministry of Economy and Finance, the Banque de France, as well as bankers and brokers discussed the issue in a two-hour meeting on Wednesday. Bersi told AFP that the case “will continue next week”.

Formally, the governor of the Banque de France will have to propose the monthly payment to the Minister of the Economy. The ministry adds that it “could start on February 1 or March 1.” Such a change in the calculation method – a first in the history of the wear rate, introduced in 1966 – would also be only temporary, not a deep reform of the mechanism.

The new calculation method “could take one or two quarters,” a participant in Tuesday’s meeting told AFP on condition of anonymity.

Increase in tariffs

From January 1, the amortization rate is set at 3.57%, including all costs, for loans of 20 years and more. The average lending rate (excluding insurance and ancillary costs) is approaching: measured at 2.04% in December by the Banque de France and even 2.25% in November by the CSA/Crédit Logement Observatory, after a very rapid increase in recent months. .

This increase in the rate is costly for the borrower: for example, if the rate of a loan of 150,000 euros over 20 years is between 1% and 2%, the amount due in penalty rises to about 165,500 euros. 182,000 euros, which is about 16,500 extra euros. Julie Bachet, general manager of the website Vousfinancer, said the measure “will allow us to prevent the granting of credit”. Even this is “risks that contribute to the acceleration of the growth of credit interest rates.”

Good news for Brice Cardi, president of the chain of real estate agencies L’Adresse, who notes that “in the last quarter of 2022, almost half of our agencies had to face loan rejections resulting in the disruption of ongoing sales. “. “The monthly revision of the erosion rate should help facilitate lending and therefore make the market more fluid,” he said.