May 5, 2022
01:55
–
Belfius, BNP Paribas Fortis, KBC/CBC and even CPH Banque have increased the interest rate on their “green” renovation loan.
–
Renovating is getting more and more expensive. This is not only due to the multiple increases in the price of building materials, but now also to interest rates for credits specific to energy renovation. Since the beginning of the year, at least four banks have had to revise the rate of these loans upwards, known to be more advantageous than that of the “classic” renovation loan.
–
Belfiuswhich still offered, in 2021, a rate of 1,30% (TAEG) for its green renovation loan, now offers a rate of 1,40%. BNP Paribas Fortis, leading bank on the mortgage loan market in Belgium, has just increased the rate of its energy loan by 1,25% to 1,45%. CPH bank, that offered the best rate for energy-saving work (1,09%) again last February, was forced to increase it to 1,49%. Chez KBC/CBC, we confirm – without quantifying it – the slight increase in the rate of the green loan since the beginning of the year.
–
Inflation as an explanation
“All borrowing rates are going up, banks can’t help it.”
Patrick Segers
Mortgage broker
–
–
–
Energy loans are therefore not immune either to the general rise in borrowing rates. “The sharp increase in market interest rates has an impact on all loans“, confirms Ilse De Muyer, spokesperson for KBC/CBC. “All rates are increasing, even for green/energy loans. Banks can’t do otherwise,” says mortgage broker Patrick Segers.
–
“The rise in rates is essentially due to the great return of inflation. It is logical, in this context, especially if inflation persists over a longer period, for rates to rise. This is the very essence of interest rate: they compensate for the loss of value of money due to inflation”explains ING economist Philippe Ledent.
–
All housing loans impacted
“The rise in rates is essentially due to the great return of inflation.”
Philippe Ledent
Economist at ING
–
–
–
The rise in long-term rates inevitably has an impact on the various home loan products. “We will never see a huge distortion between products of the same range, for example mortgage loans and renovation loans. Some banks may position themselves more on one product than another from a commercial point of view, but this cannot alter the underlying trend”, analyzes the economist.
–
Since the beginning of the year, the long-term interest rates go up all over Europe. In Belgium, theBelgian OLO at 10 years, key indicator of the mortgage market, which was still in negative territory at the end of 2021, settled at 1.576% this Wednesday, a level that it had not reached since the summer of 2014. Since mid-February, the trend has been even more marked, especially after a meeting of the European Central Bank (ECB) during which Christine Lagarde announced a small tightening monetary policy.
–
Perspectives
“The upside potential still remains limited in the coming months given the fragile economy.”
Philippe Ledent
Economist at ING
–
–
–
For Philippe Ledent, “the upside potential remains limited despite everything in the coming months given the economic fragility itself linked to the war in Ukraine. The level from which rates would represent a real big drag on the economy n is not so far from the levels that we currently know, which should justify thatthey will not continue to climb as strongly as during the last two months“. But the economist does not exclude a “overshooting”that is to say a moment when “rates finally rise more than justified following a panic on the bond market, but this is difficult to predict. If this were to happen, a drop in rates would follow to return at a more fundamental level,” he explains.
–
The summary
- Since the beginning of the year, several banks have increased the rate of their green/energy loan.
- A trend that is following in the footsteps of mortgage loan rates.
- Inflation remains the main factor behind this general increase in long rates.
–
–
–
