With rising rates, it has become more difficult for future owners to access a home loan. A problem that the High Financial Stability Board intends to solve thanks to 4 new measures.
Do you want to borrow to buy real estate? In the context where real estate prices Due to the lack of expandable debt capacity, the implementation of such a project is increasingly difficult. The reference body in this area, the Council for High Financial Stability (HCSF), nevertheless communicated measures aimed at facilitating the access of natural persons to real estate loans. What are the 3 new features announced?
Measure No. 1: the possibility of financing the purchase of works over 27 years old
Do you want to buy a property for renovation and the volume of work exceeds 10% of the total operating costs? The good news: the duration of such financing could reach 27 years instead of 25 years. In fact, the maximum duration of a real estate loan is basically limited to 25 years. Until now, the Council for High Financial Stability has only allowed an exception for 20% of loans granted.
From now on, the files of borrowers with a renovation project will be able to escape the 25-year rule and reach 27 years, which will have the effect of minimizing the amount of monthly payments. A source close to the HCSF gives reasons for this easing of conditions for new property loans: “An important measure is to provide some flexibility and encourage renovation”.
Measure #2: exemption calculated on rolling quarters
In order to avoid excessive indebtedness of natural persons, HCSF has set strict rules: not only the duration of financing cannot exceed 25 years, but the debt ratio itself cannot exceed 35%. However, banks can deviate from these rules for a maximum of 20% of the real estate loan portfolios provided. The percentage whose calculation method will change to give banks more flexibility.
Until now, exemptions granted by banking facilities were calculated on the basis of calendar quarters. The result? In the event of an overrun during the quarter, the bank concerned had to block the provision of new real estate loans outside the standards set by the HCSF.
From now on, it will no longer be calculated according to the calendar quarter, but according to the rolling quarter. In other words: if the bank has complied with the exemption rate during the last 3 months, it will be able to continue to grant new real estate loans for a period of more than 25 years and/or with a debt ratio of more than 35%.
Measure No. 3: exclusion of monthly installments of the bridging loan from the calculation of the debt ratio
Are you already an owner and would like to move and buy a new apartment or house? A bridging loan allows you to implement this project without having to sell your old house. The only drawback: until now, the interest paid on this loan has been included in the calculation of the household effort rate. Only the paid-up capital was excluded. Obtaining a loan agreement as part of your property purchase project can therefore be more difficult, if not impossible.
However, the High Financial Stability Board has announced that bridging loans will henceforth be excluded from the calculation of borrowers’ leverage. Neither the capital nor the interest will reduce the borrowing capacity of the households concerned, provided that the bridging loan in question is not “dry” and is therefore accompanied by other traditional real estate financing. A source close to HCSF summarizes the basic idea: “The aim is to ensure that the property you already have is not an obstacle to the provision of a new loan.”