Mortgage: everything you can negotiate except the rate


With floor rates reaching an average of 1.05% according to the CSA Housing Credit Observatory, borrowing conditions remain historically attractive this summer. Going into debt over 20 years – the most common duration – even allows a household to benefit from an average rate of 0.98%, and thus go below the 1% mark! Never seen. Faced with such records, the vigilance of borrowers should no longer focus so much on the cost of interest as on a few specific points of the contract, in order to further lower the bill, deal with certain financial contingencies or even better spread out their monthly payments.

While borrowing has never cost households so little, loan insurance is often a household’s largest item of expenditure… ahead of interest. So play the competition by choosing a contract different from that of your bank. Almost all borrowers have an interest in gaining purchasing power. The fact of “untying” its credit and its insurance makes it possible, according to the brokers, to save on average 15,000 euros over the total duration of the loan. According to our simulations, a couple in their thirties in good health could even save 22,000 euros by opting for a contract outside the bank.

As a reminder, in theory, the right to compete for loan insurance from your bank is governed by three different laws. Individuals can choose to subscribe to a contract outside that of their bank at the time of signing the loan, but also change it during the year following the signing of the contract, or even on each anniversary date of the latter.

In reality, however, the operation can be more complicated. If your bank is one of the recalcitrant establishments illegally refusing your request, your room for maneuver is limited, especially if your file is at the limit of financing. The most effective – but paradoxical – method consists in… accepting group insurance from your bank, without negotiating it. The latter will thus be more inclined to even agree to finance you and the operation will even allow you to obtain – by insisting – a good rate.

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Application fee

“They are part of the costs very often negotiated when drafting the contract”, confirms Christophe Grouas, deputy general manager of Artemis brokerage. Almost all banks charge administrative fees. A remuneration that they justify by the constitution of the file and the time spent by their advisers to analyze your file. Not to mention the follow-up of the latter for 20 or 25 years. They are charged according to a percentage of the amount borrowed – around 1% – or by a lump sum. A credit of 200,000 euros will thus cost you 2,000 euros in a bank if the amount is not capped. “When we exceed 1,000 euros, we can consider that it is already expensive” adds Christophe Grouas.

These rates are transparent because they are displayed on the bank’s public rate schedule. Which doesn’t mean they’re set in stone. Also, the bank can make a gesture to reduce its amount in the specific conditions of the contract. If your file is fast – because it is well prepared -, you will be able to arrive in a strong position to ask for the reduction, or even the disappearance of these costs. A broker, who knows the habits of banks, can also be very useful in negotiating these fees downwards. Be careful, however, not to burn all its cartridges with the administrative fees. “Even if you have to negotiate, you might as well start with loan insurance, which generates much greater savings,” recalls Maël Bernier.

Prepayment charges

A mortgage repaid earlier than expected can cost you dearly. Whether it is bought by a competing bank or filled in advance thanks to an inflow of money, you have a good chance of paying compensation. They are determined by two methods, and the less expensive of the two is paid by the borrower:

For a loan of 200,000 euros over 20 years taken out in 2013 at the rate of 3%, the early repayment indemnities thus represent 2,000 euros according to the calculations of the broker Meilleurtaux.

“We intervene a lot on this point, assures Christophe Grouas, deputy general manager of Artemis brokerage, because this clause has a good chance of being used when buying credit by other banks”. The latter take different positions of principle. Some do not establish any penalties, others apply them systematically. It is also possible for them to make them disappear after 5 years of loan, or to apply penalties only in the event of repurchase by competition. If your bank applies penalties, do not hesitate to negotiate, especially if you plan to resell your property in the medium term.

The cost of the credit card

A mortgage represents much more than interest in the eyes of your bank When a customer signs his contract, in the overwhelming majority of cases, he also opens a current account – with the bank card associated with him – but potentially brings back with him savings. The latter is essential for banks, because to sum up roughly, it allows to cover the risk agreed when it lends to a company or a household. It is also not for nothing that banks particularly appreciate savings when taking out a mortgage, even if it is not mobilized for the operation.

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