French banks practice responsible credit and are concerned about the protection of their customers, assured Friday the French Banking Federation after the authorities asked Banks should limit their face offer to avoid overheating the mortgage.
The profession wishes to remind you that banks practice responsible credit
that is to say that they lend according to reasonable repayment capacities and with a view to protecting their customers. affirms the federation in a press release. The profession explains, however, sharing the need to avoid over-indebtedness, and emphasizes more particularly that the effort rate is analyzed on a case-by-case basis, depending on the individual situation of the borrower, is added. The federation notes that a detailed recommendation will follow in the coming days. It will analyze it to assess the impact on real estate credit in France, continues the press release.
The High Council for Financial Stability (HCSF), which brings together the Ministry of Economy and the Best Lenders Bank, on Thursday recommended to banks not to grant mortgage for more than 25 years . He also asks them not to accept files in which reimbursements represent more than a third of household income. These announcements mark a turning point for the financial authorities, which until now had displayed their confidence in the face of a booming French housing market.
Rates at historic lows
The latter benefits from extremely favorable credit conditions, themselves fueled for years by the interventionist policy of the Cream Bank, which practices zero or even zero interest rates. Negative. The rates of French real estate loans are themselves at their historic low, hardly more than 1%. It is roughly similar to inflation, which is almost like saying that one can gain purchasing power by borrowing.
Repayment durations are often over decades and the total amount borrowed exceeded last year the bar of 1000 billion dollars. These historical conditions contribute to bringing the housing market to incandescent: the annual number of transactions has just passed the million in the old one and the prices increase regularly since 2015. In this context, the financial authorities Eres are now openly concerned with the level of household debt in terms of real estate credit.