Borrower insurance, variable rate, staggering: what if my mortgage is blocked by the wear rate?

The depreciation rate, the maximum rate at which you can borrow, was raised on 1 October. It is sometimes difficult to borrow the necessary amount for one’s real estate projects. What to do if the attrition rate blocks your loan?

The wear rate is the maximum interest rate you can borrow at. Its purpose is to avoid borrowing from abuse rate. In time inflation, this protection unfortunately limits some borrowers. The increase in this rate is one of the consequences of the new measures adopted by the European Central Bank (ECB), the latter tighten monetary policy to fight inflation.

How do I check my attrition rate?

It is stated on the loan offer APR (annual effective annual interest rate) that the amount not to be exceeded will be listed. APR includes interest, insurance costs as well as registration fee. This APR must be less than the attrition rate currently set at 3.05% for credits above 20 years. If it exceeds that, your banker will not be able to legally enter into this loan with you.

How can I slow down my wear rate?

If your APR is too high, there are several solutions available to you: they affect loan insurance, of adjustable rates or the division of the borrowed amount into several small loans.

Borrower insurance: Between €8,000 and €15,000 in savings

The first option to implement is to negotiate when borrowing borrower’s insurance. The bank generally offers one, up to 30% to 40% of the loanbut it is possible to change this insurance or try to negotiate it.

Included in the calculation of APR, playing on the insurance can allow you to reduce this rate. It is also possible to change borrower’s insurance. The interest will then be to make play the competition between the percentage set by your bank and what you can get from another insurance company.

Also read:
Real estate credit: loans difficult to obtain after 45, five strategies to bypass the attrition rate

In an article, TF1 explains that “the French realize on average between 8,000 and 15,000 euros in savings” by turning to insurances other than those offered automatically by their banking connections “for an average loan amount which is currently approaching 200,000 euros”.

Couple borrowers can too lower their insurance quota. Specifically, if this is lowered to 75% and one of the two borrowers dies before the total repayment of the credit, the other must continue to pay the remaining 25%. This makes it possible to mechanically lower the weight of borrower insurance. It is also possible to use a foresight to be 100% covered.

The loan with a variable interest rate: watch out for the ceiling

It is also possible to borrow at a variable interest rate. However, it is important to ensure that a ceiling is foreseen and that it is still reasonable. “They allow you to get credit interest initially more interesting than with a traditional loan”, explained Pierre Chapon, co-founder of the broker Pretto to Midi Libre in September. He explains that with a “tariff ceiling 1 the risk is limited, then credit interest rate can change by 1% upwards as well as downwards. On the other hand, if a adjustable rate ceiling 2 may help an experienced investor, I do not recommend it to unsophisticated borrowers”

The multiline loan: shifting the loans

Two final potential solutions are put forward by Cécile Roquelaure, director of studies for the broker Empruntis, interviewed by Midi Libre last month. “The multi-line loan gives e.g. option to borrow part of the sum over 10 years and the other part over 20 years to reduce the annual effective annual interest below the rate of wear and tear.”

The loan in the form of family SCI

Finally, as a last resort, “It is also sometimes possible to borrow in the form of a Family SCI. For the latter, the treatment is slightly different than for conventional borrowers. Some brokers offer this option to pass difficult cases.”

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