“A gas plant? » asks Cécile Roquelaure, director of studies for the broker Empruntis. In an interview published Monday on the website of Parisian, the Minister of Ecological Transition Christophe Béchu announced the launch of a discussion around a new type of bank loan. “Too many households are refused, banks must make efforts. This involves new financing mechanisms, I am thinking of “ultimate” or “mortgage” loans,” explains the minister. Faced with an unprecedented housing crisis, the minister wants to combine these loans in a new hybrid form.
For Cécile Roquelaure, if, “on paper”, she congratulates the minister “for his capacity for innovation and his desire to push the banks to find new solutions”, these loans are not aimed at Mr. and Mrs. Tout- le-Monde and are not the solution to the housing crisis. Point deciphers the issues of these little-known bank loans.
The ultimate loan, an expensive and risky product
The final loan is distinguished from a traditional loan by its repayment terms. “When you take out a loan in fine, to put it bluntly, you will pay off your credit at the end of the loan term,” explains Cécile Roquelaure. Clearly, a person taking out this type of loan only has to pay the interest on the loan plus the loan insurance every month and will only repay the borrowed capital at the end of the financing period. The very opposite of the repayable loan, at the end of which the borrower no longer owes anything to the creditor.
“The borrower must therefore build up significant financial assets enabling him to pay his debt,” explains Cécile Roquelaure. But this type of loan is not without cost. First, since the borrower only repays his capital at the end of the loan, interest remains significant throughout the entire financing period. Second, the interest rates on bullet loans are relatively high. “The bank is betting on the future, hoping that, when you reach the end of your credit, you will have built up the assets necessary to repay it. And when the bank takes a risk, it makes you pay more,” explains Cécile Roquelaure.
« [J’appelle] to a certain prudence on loans repayable in fine. The latter are more risky since they extend the duration of household debt; they are therefore generally more expensive, and banks generally require more guarantees. They are already legally possible in France, but have developed little for this reason,” explains the governor of the Bank of France François Villeroy de Galhau on LinkedIn.
To ensure the solidity of the borrower’s file, banks request significant financial resources, often accompanied by collateral, a guarantee of payment of capital through a savings product. As Cécile Roquelaure explains, this loan is not so much intended for simple buyers of property, but rather for “informed” investors receiving income from assets.
The mortgage loan, a costly and frightening loan for the French
The mortgage loan has been around for many years. “This loan is based on a real guarantee: a mortgage,” says Cécile Roquelaure. For the record, a mortgage allows a bank to seize a property and sell it in the event of non-repayment. “The French don’t like mortgages. They say to themselves: “be careful, we can resell my property”. This is true, but it is also the case with a surety organization [auquel souscrit un emprunteur lors d’un prêt classique] », Explains the expert.
The interest on these loans is slightly higher than a loan with traditional collateral. In fact, banks grant these loans, in particular, to borrowers with more “tense” records, these requests being considered a little more risky. In short, “these are more technical loans, reserved for types of projects that banks like less,” explains the director of studies at Empruntis.
Restore purchasing power to the French?
Christophe Béchu’s objective is to create a new financial package, combining traditional loan, bullet loan and mortgage loan. “Their principle is simple: you want to buy a property, you take out a loan over 20 or 25 years not for 100% of the price but for 80%, which you typically repay over time. The remaining 20% remains in the form of a mortgage on which you only repay the interest and not the capital. This will only be reimbursed upon resale,” explains the minister to Parisian. “The final loan or mortgage allows you to own the property and its land, but defers the repayment of part of the capital, which makes it possible to obtain lower monthly payments or to borrow more for a larger person”, supports Christophe Béchu.
However, these loans cannot be aimed at all French people, according to the analysis of Cécile Roquelaure. As stated previously, bullet loans require a fairly significant savings capacity and technical knowledge.
READ ALSO More than 3 million vacant homes in FranceFurthermore, the French Banking Federation indicates to Point that “a credit ultimately is by construction more expensive in interest than a depreciable credit while we have entered a context of higher rates. In France, bullet loans can sometimes be appropriate in certain property or rental investment transactions and very rarely in property ownership.” Banking organizations will meet the Minister of Ecological Transition by the end of February to discuss this subject.
For Cécile Roquelaure, the solution to the housing crisis does not lie in the creation of these technical and risky loans. “Today, the problem is not so much access to credit, but rather the price of real estate. There are simpler solutions than these gas plants. »
2024-02-16 07:44:00
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