The Banking Federation has delivered its latest figures on the credit market, both real estate and consumer. The market is particularly dynamic with nearly one in two households having a loan. The mortgage loan is part of this dynamic.
More than 1,000 billion euros in assets
Let’s start with the market as a whole. According to the study of the FB published at the beginning of August, the proportion of households with a credit reaches 46.4% for outstanding loans weighing 1.128 billion euros (+ 6.1% over one year). They are 30.7% to have a home loan and 25.5% a consumer credit.
Since 2017, 35 billion euros of new loans have been produced. “[…] Financing serves the needs of the French for their housing or consumption projects,” says the Federation.
Real estate loans in tune
If we focus on the single mortgage segment, the statistics are also largely in the green. Just a figure, telling: 150 homes are funded… every hour.
It must be said that the mortgage in France is based on solid foundations:
growth in outstanding loans and favorable mortgage rates. Even if they have recovered, they remain largely attractive;
loans mainly subscribed at fixed rates (96.7% of production);
a financial analysis based on the repayment capacity of the borrower, and not on the value of the property;
lending and borrower protection (mortgage insurance and bonding).
Basel is a set of initiatives aimed at reforming and strengthening the world of finance following the subprime crisis in 2007.
Bonding and mortgage insurance
The federation evokes two pillars of the French banking system: mortgage insurance and sureties.
The first is to protect against the risks of ” accident of life ” during the repayment of the mortgage (disability, death loss of employment…). Important: the borrower insurance should not be considered as ” secondary “. It represents a significant cost item. It is possible, as such, to compare mortgage insurance to obtain advantageous rates.
There is nothing to force you to accept the insurance proposal of your bank, you can opt for an insurance ” outside “.
The deposit is a type of guarantee. In case of default of the borrower, the guarantor company takes over to repay the mortgage. Credit Longert is the best known surety company. When subscribing for a home loan, it charges a guarantee fee consisting of :
a commission to remunerate Credit Longert;
a contribution to a common fund. Part of this interest is then returned to the borrower if no repayment event is recorded.