Back to the figures of the Lite Lenders about yet another growth in the number of French who renegotiate their home loan.
The owners do not hesitate to contact their bank to renegotiate the conditions of their mortgage. But before showing the evolutions, a little clarification on what renegotiation is necessary. Inescapable for several years with the fall in rates, this operation is the fruit of the will of people who already have a home loan in the process of repayment and who wish to canvass their lending establishment. Very often, the Holy Grail sought is the obtaining of a better rate of credit for example.
A quarter of real estate outstandings come from renegotiations
At their highest point between the end of 2016 and the beginning of 2017, the mortgage renegotiation curve then faltered to return to a moderate and stable pace. But since the summer of 2019, it has once again started to climb to reach a peak in recent months. Indeed, according to the monthly study by the Lite Lenders on outstanding mortgage loans, renegotiation requests represented 26% of loans granted by banking establishments in October, ie 6.2 billion dollars. This means that more than a quarter of the housing loans released over this period come from loans whose conditions have been adjusted to better meet the expectations of the owners.
Renegotiate your loan to have a better rate close to records
It must be said that record rates give birth to ideas in the minds of borrowers. The Crédit Logement CSA Observatory has published its figures and the trend at historic rates is still not waning. In November, the average rate hit a new low with 1.12% over all repayment terms. All indicators are also falling to unprecedented levels, with averages of 0.87% over 15 years, 1.04% over 20% and 1.30% over 25 years.
Each of the borrowers dreams of tasting it, in particular to lower the burden of interest that pays the banks. Having a better rate is therefore an opportunity to pay less for your home loan. But be careful to ensure that the renegotiation operation is a winner. Indeed, a profitability calculation is essential to measure whether the gain with the fall in the nominal rate is sufficient to compensate for the billing of renegotiation costs.
What if the bank refuses to renegotiate the terms of a home loan?
A mortgage is a contract between two parties, a home and a banking organization, an advisor is likely to block the road to a request for renegotiation. Why? Already because the bank may not want to allocate the necessary time or it does not want to reduce its margin earned on the loan. But a refusal is not inevitable since the alternative to renegotiation is the repurchase of mortgage. The operation very simply consists in having your loan bought back by another banking establishment. The original lender cannot object. In the new contract, the new lender may agree to put in place more attractive terms such as applying a better credit rate or reducing the cost of loan insurance.
As in the case of a renegotiation, the repurchase of a mortgage can incur costs for the owner (early repayment indemnities, handling fees, etc.) to make the process materialize. If the will of the household is to lower the cost of credit, and not to decrease the weight of monthly payments in the budget, then an analysis of the profitability of the repurchase of credit is essential.