Real estate credit: brokers under pressure from rising rates

Real estate credit: brokers under pressure from rising rates

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Industry professionals are concerned about banks’ reluctance to extend credit to brokers.

A real estate agency in Biarritz, May 23, 2021. (AFP / GAIZKA IROZ)

In the world of banking,

the period of rising rates “is tense for everyone: for borrowers, bankers, brokers”, and the latter are particularly affected. This is the observation made by AFP Ludovic Huzieux, co-founder of Artémis brokerage.

Traditional banks currently reject 21% of loan applications made by brokers

, four times more than at the end of last year, indicates the director general of the French Association of intermediaries in bancassurance (AFIB) Géraud Cambournac. “We are coming to a deadlock situation which is becoming unbearable,” he is alarmed.

Without an intermediary, no more commission to be paid by the bank or to be included in the calculation of the overall effective rate of the loan (APR), capped by law.

Too rapid a rise in interest rates?

This type of refusal of file “is a pity, but the bank (credit) offer is still sufficiently important”, tempers Cécile Roquelaure, of the brokerage network Empruntis.

Relations between bankers and their business introducers have always been marred by tensions

, but it was the rapid rise in interest rates that reignited the spark. These went from an average of 1.12% in December to a range of 1.25% to 1.30% in April, according to the Banque de France.

Added to this nominal rate are all the costs associated with obtaining credit, including the commission charged by brokers and the cost of borrower insurance. The total must not exceed the usury rate, intended to protect individuals from abusive borrowing conditions and which is set quarterly by the Banque de France. For exemple,

the rate of wear is currently 2.40% for a loan over 20 years


a level now considered too low by many market players

, which no longer find enough air for their margins. Other constraints also come into play, such as the capping of monthly drafts according to income and the limitation of the duration of indebtedness in certain cases.

Wait until October 1st for the wear rate to go up

It is “currently more difficult to obtain a loan”, summarizes a note from the comparator, even if for the moment the volumes are not falling.

The Banque de France does not observe any slowdown in the granting of new housing loans

: outstandings were even up 6.3% year on year in April. Kissy Peron, broker and leader of a community around the popularization of credit on social networks, does not see the flow of customers drying up for the moment. People “will continue to buy” real estate, she explains to AFP, and brokers “know how to diversify into products that are at least as profitable: consolidation of loans, consumer credit, even training on real estate investment.

Given its method of calculation, it will be necessary to wait until October 1st for the rate of wear and tear to rise significantly, unless there is a political decision by then. “Some will be able to weather the storm, for others it will be more difficult”, worries Géraud Cambournac. In the longer term, the president of the CAFPI brokerage network Olivier Lendrevie dismisses the lasting threat of a rise in rates for his profession.

This new market environment “will make borrowers more aware of the importance of shopping around

to compare the rates of different banks”, he believes. The latter will nevertheless remain in a position of strength: the end of low rates means more margin for them, while the remuneration of brokers, in fees to the client and of the bank, depends on the volume of credits.

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