Mortgage loan: fewer seniors to borrow in 2020

After examining the files of female single borrowers in 2020, La Centrale de Financement is now looking at senior borrowers [1]. For the most part already owners, borrowers over 50 are a priori excellent profiles for banks: they often have a good financial base, have the possibility of providing a larger contribution and borrow on shorter durations.

However, despite these many advantages, they are also more likely to develop more health problems, likely to significantly increase the cost of their loan insurance ... With the health crisis, banking institutions are more cautious about with regard to senior profiles: the proportion of borrowers over 50 has thus decreased by more than 2 points, between 2019 and 2020. So what is the typical profile of borrowers over 50 in 2020? For which project (s) and under which conditions?

Whatever the case, seniors, like other profiles, will always have the possibility of pursuing the realization of their real estate projects under favorable conditions, in this month of June 2021, thanks to low credit rates and still as attractive, despite an average increase of 0.03% in borrowing rates over all loan terms.

A 2% drop in the volume of borrowers over 50 in 2020 (compared to 2019)

Borrowers over the age of 50 have been greatly impacted by the health crisis: between 2019 and 2020, their proportion, among the total borrowers financed by La Centrale de Financement, fell by 2%. This drop can be explained in particular by increased vigilance on the part of banks with regard to profiles presenting higher health risks, in this context of a global pandemic. Indeed, the elderly were statistically the fringe of the population most affected by the virus during the health crisis: already high, the costs of disability and death insurance now exceed the bank interest on the loan, for profiles in their fifties and beyond. of the.

With retirement, the drop in income limits access to mortgage loans

For borrowers over the age of 60, the drop in income linked to retirement is also a major obstacle to the financing of their real estate projects:

“Senior profiles have been the most penalized by the health crisis; already considered as populations at risk by insurers, they have been particularly affected by the virus. A difficulty to which is added that of the overall drop in their income at the time of retirement, a drop of about 25% on average [2]. In order to allow them to access real estate loans despite everything, La Centrale de Financement offers many solutions, in particular to reduce the cost of insurance. Thanks to our large network of insurance partners, we provide access to a wide choice of borrower insurance solutions (25 different contracts) allowing you to benefit from the most advantageous option, whatever your profile and financial situation! ", explains Sylvain Lefèvre, president of La Centrale de Financement.

The typical profile of the borrower over 50 in 2020

After analysis of the loan files finalized for the year 2020, Le Centrale de Financement drew up a typical portrait of the borrower over 50 years of age who is, in majority a woman (55% of cases) of 56 years old with '' an average monthly income of € 6 per month. It borrows for an average period of 160 years and for an average amount of € 17, and must be able to provide a contribution of approximately 194% of the total loan amount (€ 671), i.e. 32 of percentage points more than the average contribution volume requested in 62 (294%), all borrower profiles combined.

Borrowers over 50 prefer rental

During the year 2020, La Centrale de Financement observed a renewed preference of borrowers over 50 for the acquisition of a main residence, for 70% of them, and a real appetite for rental ( bare or furnished) in more than 27% of cases.

“Mainly second-home buyers, borrowers over 50 generally direct the realization of their real estate projects towards a change of main residence, or towards the acquisition of a second home intended for rental, which would allow them to supplement their pension. of retirement. ", adds Sylvain Lefèvre.

Among all the files financed for a project to acquire a principal residence, only 12% of the buyers are over 50 years old.

June 2021: the rate hike continues over all loan terms, but borrowing conditions remain attractive

June 2021 is a continuation of the upward trend already observed in May 2021, with a further rise in rates over all loan terms. With the rates announced in June 2021, a borrower taking out a loan of € 180 over 000 years at 25% will see his monthly payment rise to € 1,31 for a total cost of credit of € 717,90. , or nearly 31% more than the previous month (corresponding to an additional cost of more than 151 euros over 2,3 years) for a loan of the same duration and the same amount.

Rate development

Average real estate rates of June 2021 by loan duration

The interest rate conditions generally observed are up 0.03%, on average, for all loan terms combined. In detail: the most significant increases in credit rates are observed mainly for loans contracted over 10 years, as well as for those over 15, 20 and 25 years, with an increase of + 0.04% and + 0.03% respectively by report to May 2021.

The best rates obtained in June 2021 are, for the majority of loan terms, slightly more advantageous than those obtained in May 2021. For loans contracted over a period of 7 years, a significant decrease is thus observed. by -0,07% compared to the previous month; for loans contracted over 10 and 20 years, the best rates obtained in June 2021 are less significant, by 0,01 percentage point compared to May 2021.