Real Estate Credit: Interest Rate Rise Accelerated In May

2020-06-03   |   by CusiGO

Since the outbreak of the coronavirus crisis, the rise of real estate credit rate has accelerated. According to the monthly housing credit survey / CSA released on Wednesday, the average interest rate in May was 7 basis points higher than that in April, with an average of 1.25%.

“As a result, since the beginning of the year, the distortions in the structure of credit production became more severe in May, as the decline in credit production was similar to that in the subprime crisis.”.

Since December, average interest rates across the market have increased by 13 basis points. “This recovery ends the two years that the average exchange rate is often maintained in the case of inflation.” housing credit also explains this trend.

At the end of December, the senior financial stability Committee (HCSF), chaired by the Minister of finance, implemented measures to control credit packaging. Banks are now explicitly required to comply with the 33% effort rate (“disposable income”) and limit the loan term to 25 years.

These measures, together with the deterioration of the situation of the covid-19 crisis fund, have had an impact, which the middlemen regret. Over the same period, the rate of home loans to households with the least personal input was 25 percentage points higher than the average.

However, not all recommendations have been implemented in the text. As a result, the average loan maturity in May was 230 months, an increase of two months since the outbreak of the epidemic. The rise in interest rates and real estate prices was partially offset by the extension of time.