2023-10-20 20:01:31
Real estate credit is becoming less and less accessible to small and medium-sized budgets. Due to rising interest rates, applicants whose loan applications were successful earn up to 30% more than those in 2021, according to the real estate broker’s survey Better rates.
The real estate loan now reserved for the rich
Today, only high-income households have access to home loans. In 2022, it was necessary to receive at least 2,840 euros net per month, in order to benefit from a property loan of 200,000 euros, repayable over 20 years. In 2023, a household must earn more than 3,700 euros per month to have access to this credit. An amount which exceeds the median salary of French people by 1,200 euros and which represents, according to the survey Meilleurtaux, an increase of 31% in 20 months. A worrying increase, especially since few employees have benefited from a proportional increase in salary.
On the other hand, the borrowing capacity of households has declined, with 215,000 euros to date, compared to 282,000 euros in 2022 for a household earning 4,000 euros per month. The higher the salary, the greater the reduction. “ Buyers cannot keep up and sellers are not ready to lower their prices or simply borrow once more to endure the surge in rates,” explains specialist Maël Bernier for Better rates.
When will credit rates drop?
Despite this significant increase in mortgage rates, many banks are still granting loans to their customers and are even open to negotiations which might result in a reduction of 0.3%. However, these facilities are not without compensation. “They are particularly strict on savings following operation which must be around 30% of income for good files”, underlines the expert. Furthermore, the debt rate, which rose from 9% of eligible applications to 40%, while it was at 5% last June, means that applications having reached this threshold have practically no chance of be accepted.
On the other hand, those whose debt ratio is between 35 and 40%, or 31% of applicants, can have their loan request accepted, given that banks can accept up to 20% of this type of files. Concerning a possible drop in mortgage rates, expert Maël Bernier is uncertain: “ Rates are expected to peak at 4.5% (excluding insurance) by the end of the year and stabilize for several months. For the decline, we will have to see how inflation evolves. But what is certain is that the ambition is there on the banks’ side for 2024.”
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