December 25, 2019

First increases in credit rates, but with limited impact.

Paris, November 22, 2016 – The impact of the surge in government borrowing rates was quick to be felt… As of November 17, a regional bank increased its rates, followed today by a bank national. Other establishments should follow in the coming days with effective increases in early December. Despite this, the banks remain in strong clientele and always grant rate reductions for the best profiles or young people, thus limiting the impact of the rise.

A limited increase in credit rates compared to changes in the 10-year OAT

A limited increase in credit rates compared to changes in the 10-year OAT

Since the announcement of Donald Trump’s “surprise” election, which caused US government borrowing rates to soar, the 10-year OAT rate has remained at more than 0.70%, dropping thus in a few weeks from one of its lowest levels (0.11% on September 29) to a high since January 2016 (0.83% on November 14).

In this context, a regional bank was the first to raise its credit rates, from 0.10% to 0.50% depending on borrower profiles and loan durations, but with smaller increases over the long and young borrowers, demonstrating its desire to remain attractive in these client segments. A large national bank also raised its credit rates on November 22, but in smaller proportions – from 0.02% to 0.20% depending on the profile – by also granting rate reductions for those under 30 years of age.

“In the current context, banks anticipate an increase in inflation and their refinancing costs, leading them to increase their credit rates in order to preserve their margins. However, the first increases applied demonstrate the willingness of our partners to pass on only partially raising government borrowing rates so as not to block market dynamics. The more so as, remaining in strong conquest of customers, they always grant rate reductions to certain target profiles de facto limiting the impact of the increases posted ” analyzes Sandrine Allonier, responsible for banking relations at Good Finance.

An inevitable ascent, but perhaps not sustainable…

An inevitable ascent, but perhaps not sustainable…

If it is undeniable that in December we should witness a global movement of rising credit rates at most of our banking partners, this increase could only be limited in time”The first upswing should become widespread in December and could continue in early 2017 without this movement being brutal. But they could only be short-term if the tensions on government borrowing rates ease: the banks have very ambitious 2017 credit production targets because they are equivalent to those of 2016.

In addition, as long as the Cream Bank does not raise its refinancing rates close to zero and deposit rates still negative, the banks remain encouraged to lend! In this context, they should have the will to maintain attractive credit rates in 2017, and could even perhaps choose to lower them again in the spring, a key period for real estate” concludes Allen Bay, president to finance yourself.

About Your Finance

Founded in 2008 by Allen Bay, Good Finance, specialist in mortgage brokerage, provides personalized support to individuals in the search for the best financing solution for their real estate project. Good Finance’s strategy is based on meeting with a single interlocutor expert in financing, transparency (preparation of the financial dossier carried out with the client), and the guarantee of finding the most comprehensive global solution quickly (less than a week) adequate (loan insurance, rates, guarantees, monthly payments, terms, cost of credit, administration fees, banking partners). Good Finance also offers solutions for professional loans and the repurchase of credits.

Key figures : 148 branches in France and French overseas departments and territories, 500 employees, 1.5 billion USD of loans financed in 2015.


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