During an interview on BFM Business, François Villeroy de Galhau denied claims that 40 to 45% of credit applications are rejected due to the low usury rate.
Figures that are not very credible according to the governor of the Banque de France
François Villeroy de Galhau is the governor of the Banque de France. According to him, the mortgage market is very dynamic. According to François Villeroy de Galhau, rates are currently no problem for real estate files.
According to him, the rates are gradually increasing and are above 6% growth. Furthermore, he stated that “rates are gradually going up. In July, we were on average at 1.45%. This is a little more than when there were the lowest rates, around 1.1% or 1.2%. But it is far below the historical average. In the last 15 years we have been at 2.7%. The rates remain very favorable and the mortgages remain very well financed “
The Association Française des Intermédiaires en Banque Assurance investigated the brokerage practices that no longer pass with the usury rate. They found that 45% of the files are rejected. This is considered very little credible according to François Villeroy de Galhau.
At the end of September, François Villeroy de Galhau says that usury rates will obviously increase. The Banque de France controls the crowding-out effects, as Villeroy de Galhau points out.
In support of his thesis, François Villeroy de Galhau noted that the usury rate should protect borrowers. He also said that the media should not pass on information indicating that this banking organization wishes to lend more expensive to the French.
For home loans, the usury rate is currently 2.57% for loans over 20 years old. This cost represents the maximum rate at which a bank can lend money. Different usury rates are available for different types of loans, some can be as high as 21.11% for small personal loans or as high as 15.39% for bank overdrafts.
An ongoing controversy
The usury rate controversy continues today. François Villeroy de Galhau, governor of the Banque de France, after declaring that interest rates do not prevent mortgages. Villeroy de Galhau asked for proof that these usury rates are a problem. No association of French borrowers has been formed asking for an increase in usury rates, he said.
Bérengère Dubus, secretary of credit intermediaries for BFM Business, responded. He reminded François Villeroy de Galhau that there was no association of credit contractors. He says that the words “denial” and “contempt” perfectly describe the governor of the Banque de France. “When I listen to the governor of the Banque de France for many months, I think there are 2 words that sum up his position: it is denial and contempt. Denial of the situation. (…) We are on average at 2.25% in 25 years for young people. More than half of the applications are rejected, this is a fact ”.
He adds: “When the rates were the same as today a few years ago, we were at 4% usury rates. So the problem is there and the denial is all the stronger because it’s not just the brokers who are alerting. Notaries alerted about 3 weeks ago. The real estate world is on high alert, the managing director of Crédit Mutuel has warned. He alerts bankers. It’s not the brokers, it’s the whole real estate world, it’s all the borrowers “