The number of real estate loans fell by 5.2% between March 2017 and February 2018. This slowdown is contributing to the return of long-term loans, according to the Crédit Logement / CSA observatory published on Tuesday . Banks do not hesitate to lend money over 30 or even 35 years, reports BFMTV .
First-time buyers and modest households
This is the case of Crédit Foncier Communal Alsace and Lorraine (CFCAL). The regional bank in Strasbourg, a subsidiary of the Crédit Mutuel Arkea group, has launched an exceptional acquisition loan in recent months. Customers borrow over 35 years at 2.55% interest rate excluding insurance , reports Le Parisien . These credits represent 15% of CFCAL’s contract portfolio. Nearly every second contract (45%) concerns a loan over 25 years.
First-time buyers and modest households are in the front line. ” Our product is aimed primarily at young borrowers, of course, who dream of owning their home . But also to all those who have assets and want to invest again and to the assets, owners of their main home and have too low income to be able to borrow on a shorter term, “says Emmanuelle François, CEO of CFCAL.
1.78% rate for a loan over 30 years
This trend is benefiting borrowers penalized by rising real estate prices, or the decline in aid such as the Zero Rate Loan or APL Accession. ” While four years ago, only 15% of mortgages were spread over more than 25 years, more than 30% are registered in February. We are back on average terms of contracts more than 25 years before the Great Depression of 2008, “says Michel Mouillart, economist specializing in real estate.
Extending the term of loans can save tens of thousands of euros in purchasing power. The downside, the overall cost of credit increases. On the other hand, rates remain low. For a loan over 30 years, a borrower can expect an average rate of 1.78% . Banks and brokers hope to encourage first-time buyers to realize their projects. This file type has decreased by -20% at VousFinancer over the last 2 months of 2017.