For the past couple of months, online banks, which historically offer lower mortgage rates than traditional banks, seem to have struggled to hold that line. To the point, for some, of no longer seeing rates on their site. Have online banks dropped this product?
If you follow the news of real estate credit, you will not miss it: inflation involves French debt securities, one of the reference indicators for real estate loan rates. At the end of March, the interest rate on French government bonds (OAT) at 10 years exceeded 1%, a first for 4 years. Faced with this situation leads to last, banks are forced to raise their rates. So end the 1% loans.
The April figures confirm a trend already sketched out in March: this rising rate affects online banks in particular. While these establishments have not hesitated so far to offer extremely competitive rates, the last few weeks have shown a loss of steam in this race for mortgage loans. Let’s take an example. A 30-year-old couple, who earn 4,500 euros a month between them, wants to buy a property for 250,000 euros. They have a contribution of 50,000 euros and must therefore borrow 200,000 euros, over 20 years. From April 7, 2022, these two loans obtain, in nominal rates, 1.83% to Fortuneo and 1.75% to Boursorama. By way of comparison, for a 20-year loan at the beginning of April, brokers Meilleurtaux and Empruntis presented average rates of 1.35% and 1.34% respectively.
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Normally, the online banks hit on the land of the APR, this all-inclusive rate with insurance, guarantee and administrative fees. Traditional banks often offer higher APRs, especially because of application fees not necessarily applied by online banks, which are therefore more competitive at the time. But still there, stuck. For the same simulation on the BforBank website, it indicates that the APR of the loan (2.50%) exceeds the interest rate (set at 2.40% until July 1 for loans of 20 years and more ). This means that in this configuration, this couple’s file no longer passes at the bank
How then to explain these difficulties to remain competitive? The answers vary depending on the interlocutors. One thing is certain: this increase in rates is widespread and affects all banking establishments: the key interest rates are increasing, it is obvious to everyone, defends Xavier Prin, director of marketing and communication of Boursorama. We are therefore obliged to pass on this increase to our price list. A point of view defended by Grgory Guermonprez, France director of Fortuneo: Since last month, everyone has raised their rates. Some do it gradually, others more quickly. What is certain is that those who have not yet done so, or not in a significant way, will continue to grow in the coming weeks.
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Guillaume Rveillard, Associate Director of Retail Banking Consulting in Ailancy, gives another key to read: Online banks have been hyper-aggressive on these rates to capture customers. Faced with the current trend of rising rates, they are forced to raise theirs more quickly. An obligation that also maintains the capacity of institutions to absorb risks: online banks are perhaps more sensitive to the refinancing rate (the main key rate of the central banks, which influences the interest rate of a mortgage Ed.) because they have fewer customer deposits and can lend less on their held money, unlike traditional banks that have a buffer that allows them to to buy time.
Herv Phaure, Associate Risk Advisory at Deloitte, confirms this idea of an increased sensitivity to refinancing rates and goes further: the bank also calculates its risk rate, that is, what is the risk that the loan cannot repay . It all depends on the type of customer. The more a bank has a premium clientele, which has significant meanings, the more it can be imagined that the rates will be low because there is a lower risk and a greater potential for contribution.
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Online banks will then be forced to raise rates more quickly, otherwise they will lose too much money. A hypothesis confirmed by Xavier Prin: We are here to offer our customers the best prices whatever the market conditions, but above all we are here to last, not to sell at a loss due to dumping.
So, is this the end of real estate credit in online banks? Of course not. It should also be noted that Boursorama, although it is 1.75%, has not changed its rate for the month of March over the month of April. According to Xavier Prin, real estate credit remains a loyalty product, which interests all banking establishments. On the Fortuneo side, the story is the same: online real estate credit has just begun, I am convinced that we are only at the beginning of our online credit proposal, assures Gregory Guermonprez.
Guillaume Rveillard says the same thing: I can’t imagine that online banks no longer offer this product. Today, online banks want to offer the most comprehensive offer possible to keep customers. So I don’t see online banks changing their strategy, which currently consists of expanding their range.
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Especially if the real estate loan is not a product that allows you to make a margin, it is not without advantage: It allows you to direct the client. towards other more profitable products, since all the banks that grant a mortgage require the domiciliation of the salary in their accounts, explains Guillaume Rveillard. It is then the collection of customer behavior that induces the sale of insurance, means of payment, or tele-surveillance for example, which generates income.
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