2023-12-10 10:30:05
Evolution of borrowing conditions: a changing market
Faced with a significant drop in real estate transactions, the High Council for Financial Stability (Hcsf) recently took measures to relax the conditions of access to real estate credit. This is a direct response to the 50% drop in mortgage production over the past two years, an alarming sign of the market’s wait-and-see attitude.
The first notable measure is the authorization for banks to grant credits over a period extended to 27 years, exceeding the previous limit of 25 years. This condition is, however, accompanied by a requirement: the renovation work on the acquired property must represent at least 10% of the total amount of the operation. This change provides additional flexibility for borrowers considering renovation projects.
The second adjustment concerns bridging loans. These short-term loans, designed to help with the acquisition of real estate before the sale of another, see a significant modification: the interest on these loans will no longer be taken into account in the calculation of the effort rate. borrowers. However, the amount of the bridging loan cannot exceed 80% of the value of the property sold.
Greater flexibility for banks
The Hcsf now allows banks greater latitude in applying credit granting rules. Although the duration of loans is limited to 25 years and the debt ratio to 35%, banks can now deviate from these rules for a quota of 20% of their loans. This flexibility is increased: banks can temporarily exceed this limit over one quarter, provided they respect the 20% limit over the following two quarters.
Another innovation is the introduction of a review mechanism for refused property loan files. This system offers borrowers an opportunity to understand the reasons for refusal and, possibly, to have their file re-examined.
Optimism and caution in the sector
These adjustments, although considered minor by some market players, provoke various reactions. Maël Bernier, communications director at Meilleurtaux, emphasizes that these measures do not overturn the table but recognizes that they might provide some relief. However, she points out a form of hypocrisy in the communication around these changes, arguing that the problem does not lie so much in the reluctance of banks to lend, but rather in the strict application of the rules that they are required to follow. .
Although these adjustments do not constitute a revolution in the mortgage sector, they represent a step forward towards greater accessibility for borrowers. These measures demonstrate an awareness of the current challenges in the real estate market and the need for a more flexible approach to responding to them. However, caution remains essential, both for banking establishments and for borrowers, in a still uncertain market context.
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