The latter will also have plenty of time to pursue their real estate projects in 2021, and in particular in July, since lending rates remain low and still as attractive, with a drop of 0,02 percentage points on average. over all loan terms.
So what is the typical profile of a young borrower in 2020? For which acquisition project (s) and under which conditions?
Almost 4% more young borrowers in 2020, compared to 2019
The share of borrowers under 30 increased by around 3,8% between 2019 and 2020; they represented nearly 20% of the files finalized by La Centrale de Financement in 2020! This development is explained in particular by the excellent borrowing conditions from which some of these young borrowers were able to benefit between the end of 2019 and the first quarter of 2020: in November 2019, average mortgage rates in fact saw a significant drop. '' from one month to the next, in particular for long-term loans, with a 0,12% drop in borrowing rates (between October and November 2019) for loans taken out over a period of 20 years[1]. Since then, mortgage rates have remained relatively low and attractive, to support the dynamism of this market in a context particularly impacted by the health crisis and the implementation, by the High Council for Financial Stability (HCSF), of restrictive measures. as regards the granting of credit (duration of the loan limited to 25 years and debt ratio of 33% maximum) ... Despite the increase in the proportion of young borrowers over the whole of 2020, these, just like first-time buyers, were nevertheless the first to be penalized by the crisis in accessing mortgage loans.
The typical profile of the borrower under 30
After analyzing the loan files finalized for the year 2020, Le Centrale de Financement drew up a typical portrait of the borrower under the age of 30 who is, for the most part a man (in 65% of cases) of 27 years old with an average monthly income of € 3 per month. He borrows for an average period of 100 years and for an average amount of € 23, and must be able to provide a contribution of approximately 154% of the total loan amount (i.e. approximately € 900).
A main residence in the old one represents the preferred acquisition project of young borrowers in almost 95% of cases!
During the year 2020, La Centrale de Financement observed a renewed preference of borrowers under 30 for the acquisition of a main residence for nearly 95% of them, and in particular in the former , in 76,84% of cases; for nearly 50% of them, it is the investment in the old without work which is privileged.
What loan conditions for borrowers under 30?
If the proportion of young borrowers shows a slight increase between 2019 and 2020, their loan files are examined with more sustained attention: the tightening of the criteria of the HCSF, at the end of 2019, prompted the banks to withdraw. show more selective in granting home loans. Thus, young borrowers in 2020 were required to demonstrate that they were able to provide a higher contribution amount than that requested during the previous year.
"Banks are more careful about the criteria for granting real estate credit, in particular vis-à-vis first-time buyers: they must in particular demonstrate that they are able to save, and provide an amount contribution higher than during the previous period. To compensate for this tightening of the criteria for access to real estate credit, many young borrowers have had recourse to financial support from their ancestors, in particular through financial donations ”, adds Sylvain Lefèvre, president of La Centrale de Financement.
July 2021: lower rates on most loan terms
After a month of June marked by the continuation of the upward trend already observed in May 2021, the month of July 2021 begins with a drop in mortgage rates over most loan terms. Thus, with the rates announced in July 2021, a borrower taking out a loan of € 180 over 000 years at 25% will see his monthly payment rise to € 1,26 for a total cost of credit of 690,45 29 euros, or nearly 962% less than the previous month (corresponding to a saving of nearly 3,8 euros) for a loan of the same duration and the same amount.
Rate development
Average real estate rates for July 2021 by loan term
The interest rate conditions generally observed are down 0.02%, on average, for all loan terms combined. In detail: the most significant reductions in credit rates are observed mainly for loans taken out over 20 years and over 25 years, with a decrease of 0.05% compared to June 2021. Only the credit rates applied to loans taken out over a period of 15 years increased slightly (+ 0.01%) in July 2021 compared to the previous month. Those over 12 years have remained stable from one month to the next.
The best real estate rates of July 2021 by loan term
The best rates obtained in July 2021 are, for the majority of loan terms, remained stable and identical to those obtained in June 2021. For loans contracted over a period of 7 and 10 years, the best rates obtained were more advantageous than the previous month; there is thus a respective decrease of 0,02% and 0,01% compared to the previous month.
Profile of borrowers who completed their project in June 2021
The typical borrower of the month for June 2021
[1] In November 2019, borrowers were able to benefit from a rate of 1.05% for a loan contracted over 20 years, against 1.17% in October 2019
[2] The term "Vefa" corresponds to a new property whose construction has not yet been completed.