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Banking mobility: finding after one year – Credit Online

The Congilaw company on banking mobility was promulgated a year and a half ago. Supposed to simplify the life of customers who wish to change banks, it was to be a new factor of attrition for banking establishments. Back on the consequences on the banking market.

What is the principle of banking mobility?

What is the principle of banking mobility?

Before the entry into force of the Congilaw company, changing banks could prove to be a real headache. The client was in fact responsible for carrying out all of the procedures with his current bank and the bank he wished to bank with. But since February 2017, the Congilaw company on banking mobility has facilitated administrative procedures for customers.
Banks therefore have the entire task of transferring accounts as well as direct debit and transfer operations. A completely free device. To do this, a client must provide their current bank details and sign a transfer request mandate with their new bank, which will forward the document to the old bank.

Despite the automation of the system, it is preferable to have a certain vigilance as for the good transfer of all the operations. But also on the circulation of possible checks issued which are still not cashed before the final closing of the account to avoid unpleasant surprises.

The French, relatively loyal customers

The French, relatively loyal customers

With the simplification of the procedures for changing banks, one could have thought of a fairly substantial flow of transfers from bank accounts. Especially that among French customers, there are 20% who say they are dissatisfied. A dissatisfaction which can generate a need to change air. However, there are only 1.2 million people who took advantage of the implementation of the Congilaw company to change banks, according to the Financial Sector Advisory Committee (CCSF). A very relative proportion compared to the 80 million bank accounts in France.

Banking mobility did not have the expected impact, since it went from 4.8% to 4.5% last year. We note that 2016 was a year with a greater flow of mobility, without the presence of Congilaw company. The French were in fact more sensitive to the drop in rates in 2016 and therefore put competition to draw savings on their credits. Beyond credits, banks fail to provide differentiation services and pricing. Congilaw company is not enough to encourage customers to look elsewhere since they believe that the financial benefits will not be attractive.

Concerning customers who have taken the steps to benefit from the Congilaw company system, the mobility rate varies according to their typology. According to the Banque de France, there is more mobility among the youngest, with a peak of 7% among those aged 25 to 34. Those with the highest annual income are the most concerned by the desire to change their banking brand.

Online banks expected more migrations

Online banks expected more migrations

The big disappointed with the low mobility, it is obviously the online banks who thought they were witnessing a significant increase in new customers. Despite everything, they gain 10% of new customers per year and currently hold 5% of market share. But they still rarely manage to become the main bank since 78% of their customers use online banking as a secondary bank, despite competitive prices and encouraging welcome offers.

It must be said that physical establishments are doing everything to remain the main bank, with the rise in transfer fees from savings accounts, discouraging for total bank flight. In addition, the French always have a need for proximity and a physical network. Human contact remains a necessary factor on the banking market.

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Real estate loan: borrowing conditions still favorable over the last months of the year.

Appreciable interest rates for the best profiles

Appreciable interest rates for the best profiles

The real estate market is currently in a relatively gloomy phase. While activity started to boil at the start of the year, the last quarter saw weaker transactions. Faced with this drastic drop in the demand for credit, banking establishments choose to relax their conditions for granting credit to access home ownership. The purpose of this measure is obviously to encourage households to embark on an acquisition project.

As a result, it is still possible to borrow with competitive interest, even if a rise in rates has started in recent weeks. However, it remains relatively minimal and particularly targets subprime borrowers. Those with an advantageous profile can still successfully negotiate a competitive rate.

In fact, according to the Housing Credit Observatory / CSA, the average borrowing rate in November stood at 1.44%. But by obtaining a loan repaid over 15 years, it is possible to obtain an average rate of 1.22%. The same is true for a 20-year loan where the average rate is around 1.4%. And seniors are particularly concerned by shorter depreciation periods, due to their older age and their sometimes higher financial capacity (financial and real estate). Those with an attractive profile for banks are therefore able to negotiate a rate of this ilk.

The average duration of mortgage loans has never been higher

The average duration of mortgage loans has never been higher

Finally, the Observatory also notes that the average duration of loans continues to increase over the months. A record was even recorded in November with an average duration of 227 months. Since the start of 2018, the progression has even been an additional 8 months. Compared to the first half of 2014, this is practically an increase of 24 months.

But how to explain this increase in household debts? Already thanks to the phase of relaxation of the conditions for granting loans to maintain activity. Banking professionals take the risk of lending over longer periods. But also because the real estate market is experiencing a price appreciation in certain areas. Especially in major cities. Households therefore have no choice but to finance themselves over a longer period to become owners.

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Fixed mortgage loan Austria

Repayment is built up separately

Repayment is built up separately

In real estate finance, a fixed mortgage is a loan that is not repaid directly. Unlike the repayment mortgage, the repayment is built up separately. In the case of a fixed-rate mortgage, also called a repayment suspension loan, no repayment is made directly into the loan over the entire term of an interest period that has been agreed with the financing institution.

The repayment is suspended, for example, by a home savings contract concluded at the same time as the loan loan agreement. The amount of the home savings sum to be concluded must be congruent with the contractually agreed loan amount. However, an existing home savings contract can also be used, but here too, the home savings sum must at least correspond to the amount of the loan.

Fixed-rate mortgage as well as a repayment mortgage

Fixed-rate mortgage as well as a repayment mortgage

There is also the option of suspending repayment using a life insurance policy. Here, instead of a home savings contract, life insurance will have to be taken out. With both redemption suspension instruments, with life insurance, as well as with the home savings contract, these must be ceded to the lender. This also happens immediately when applying for a loan. It should also be mentioned that, like all other real estate loans, a fixed-rate mortgage must be secured under land register law.

It should therefore be noted that a fixed-rate mortgage as well as a repayment mortgage can only be used to finance real estate.

The decisive disadvantage of a fixed-rate mortgage, however, is definitely the fact that no repayment is made directly into the loan during the entire fixed-interest period of the loan. This eliminates the repayment effect, which arises with the repayment mortgage by the fact that repayment is permanent and the repayment immediately reduces the loan debt. As a result, the interest saved in this way is immediately added back to the repayment and the interest payments decrease continuously and in a progressive manner.

Home Loan: Go Against Misconceptions

Making your first mortgage is always a major step in life. This is why it is necessary to provide you with the baggage required to combat misconceptions. And you will see, there are many!

For the following test, it is necessary to have a paver and a small chisel (a buret). The idea is to take notes on your little pad by reading these lines.

Here are some basic tips to help you get started.


1. Borrowing with little contribution is possible!

You don’t have to have a lot of savings to get a mortgage. It is even sometimes possible to borrow without any contribution.

In truth if the banks appreciate that you have the contribution, it is essentially because it provides that you know how to save (yes the savings holds no more secret for you). They are thus reassured about your ability to repay your monthly payments.

Be aware that in fact, there are no strict rules on intake (first block in the pond). It is even possible, in certain cases, that the banks accept that you borrow without contribution. Eh yes!

For example, this may be the case if you are young or if you are considering a rental investment.
In the first case, the bankers can understand that you do not have much savings yet. In the second case, it is also understandable to want to borrow without contribution to make your savings grow.

It is possible that your bank advisor will tell you that this contribution must be at least 10% of the price, otherwise it is not worth going further. Well, that’s wrong! (second paving stone in the pond)

So finally, take note on the paveme

nt that you will throw in the pond around: it is not imperative to have a contribution to finance his real estate project.


2. Your bank will not always offer you the best credit

credit loan

Banks are making more efforts to attract new customers than for their existing customers (third paving stone thrown into the pond). This is why going through a broker to compare a maximum of offers is the right method.

We talked about this previously in an article on borrower insurance: online brokers are really cool! Unsurprisingly, online brokers are also an option with many advantages for your loan (note on your block):

  • Save time: in France, only banks can grant home loans. Going through a broker therefore allows you to compare the best market rates in the blink of an eye. No more visits to bank branches!
  • Save money: brokers have access to preferential rates from banks (because they are a business provider). So they know which banks are the best and can offer better rates than the banks themselves to their customers.
  • Delegate the creation of the file: some brokers offer to assemble and gather all the documents in the file for your loan. And this, depending on your project and your situation.
  • Low cost: broker rates may vary, but some brokers offer quality services at low cost. And note (still on your block) that some online brokers are completely free.


3. Rates are still at their lowest

home loan

Right now, the planets are aligned and the rates are low. But it is likely that rates will rise in the coming months, reducing your real estate purchasing power all the more: this is the right time to buy!

For example, for a loan of $ 200,000, it is estimated that good rates can vary from 0.84% ​​to 1.9% depending on the amount of the monthly payments and the duration of the repayment.

The double reason justifying the purchase is that given the very low rates of the moment, it is often more interesting to keep your savings and borrow the difference. In other words, it would be interesting to borrow without contribution and to borrow the difference (fourth block in the pond).


4. Credit takes time: start now!

4. Credit takes time: start now!

65% of French people believe that the various procedures required to take out a mortgage are “complicated”, according to a survey by Opinion Way.

The process of applying for a home loan can be a race against time to get the funds on time. By starting now to prepare your loan application, you save a lot of time, and above all, immense serenity.

As you can see, going through an online broker to prepare your project now allows you to better negotiate the financial conditions of the mortgage.

The pond being full of the paving stones set out in this essay, I now invite you to reread the different notes taken at the burinet on your own paving stone. What can you read there? Yes that’s right, your eyes are not playing tricks on you, you are reading well: preparing your mortgage through an online broker can generate many savings!

You can now throw your pavement in the pond. This sixth block completes this essay and you can now find out about the most interesting online brokers on the market. Several members of the Bankin ‘team have practiced the pavement exercise with Pretto, our partner on mortgage, and they are more than satisfied. So go ahead, pass the info and the pad to your next one!

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