The current context and the cost of borrowing
The historic fall in property sales in France is the result of a rapid rise in interest rates, which has a direct impact on the cost of credit. To understand how to calculate a loan rate in this context, it is crucial to consider the HCSF's (High Council for Financial Stability) 2020 proposals limiting loan terms to 25 years and indebtedness to 35% of income.
More flexible loan conditions
Bruno Le Maire proposes to relax these conditions to reduce the cost of credit. Measures include the extension of 30-year loans for young people and the introduction of subsidized-rate loans. The latter, planned for 2025, aim to offer below-market rates. Bruno Le Maire advocates easing the conditions for granting home loans, two days before a meeting of the High Council for Financial Stability (HCSF) scheduled for this Monday, December 4, 2023.
Amicable procedure for reviewing loan decisions
A major innovation is the creation of an amicable procedure between borrower and banker, aimed at reducing obstacles and the cost of credit by clarifying the reasons for a loan refusal.
Why credit rates are rising: balance and caution
François Villeroy de Galhau, Governor of the Banque de France, stresses the need for a balanced approach torising lending rates. He stresses the need to comply with HCSF standards to avoid an increase in the risk of overindebtedness.
The HCSF meeting represents a key moment for the French real estate market. The adoption of these measures could offer new prospects for buyers, while requiring constant vigilance to prevent an over-indebtedness crisis similar to that of 2008. Taking into account the cost of credit and the consequences of rising interest rates remains essential to navigating this changing market.