Real estate credit: borrowing at over 50 years is possible ... but more than 60 years old, it's rarer

If it is never too late to borrow, the earliest is best: only 3 % of borrowers are over 60 years old according to a study Vousfinancer.

While we are very interested in the age of the first real estate purchase, many seniors also want to take advantage of low rates to buy more suitable accommodation, a second home or even invest!YouFinancer, a network of 200 credit brokerage agencies, has looked into age to which we can buy, the difficulties that can be encountered to borrow, as well as the property purchasing power of retirees in more than35 cities in France.In 2020, only 12 % of borrowers are over 50 years old, a figure in slight decline because of the drop in wear rates in particular, a real obstacle to access to the credit of seniors ...

Only 3 % are over 60 years old

At youfinancer, only 12 % of borrowers are over 50 years old in 2020, against 17 % in 2019, a decline in a context of hardening of the conditions for granting credit and lowering of the wear rate, maximum rate to whichIt is possible to borrow ... Only 3 % are currently exceeding the age of 60.In particular, in question, the transition to retirement age, with the drop in income that this generates, which can range from 15 to 40 % depending on the case.Thus in 2020, among customers Tousfinancer, if only 25 % of borrowers aged 50 to 59 have income below 25,000 € per year, at 60, they are 50 %, twice as much, to be in the tranchelowest income.

"There is a decline on the part of borrowers over 50 years old in 2020, linked in particular to the tightening of the conditions of credit, in particular concerning the maximum debt rate, and the drop in the rate of wear, wear,Who penalizes the oldest borrowers due to the insurance rate that can quickly increase!Only 3 % of our customers are retired at the time of the subscription of a credit ... while at this level of rate, there is meaning to borrow, but the sooner is best, precisely to build up a heritage and heritage andPrepare for retirement!», Analysis Julie Bachet, Director General of YouFinancer.

It is therefore theoretically never too late to borrow, especially since solutions exist, even if it is better.

Seniors, good customers for banks ... but often blocked by the wear rate!

Even if seniors sometimes have savings, when possible, they have every interest in borrowing rather than mobilizing their investments if they want to invest in real estate and this, for several reasons: the rates are very low, especially on short durations: on average, 0.8 % over 10 years, 1 % over 15 years and 1.20 % over 20 years.In addition, credit rates do not depend on the age of the borrower (except exceptional reduction for those under 35) but only on the contribution or income.Seniors are therefore not penalized on the credit rate.

By borrowing, they benefit from the lever effect of credit and make their heritage grow

In the event of death, the property is reimbursed entirely by insurance and transmitted to the beneficiaries ... It is therefore also a way of preparing your succession.

In addition, seniors are considered to be good profiles for banks for several reasons: “seniors borrow on short durations -15 years on average -have contribution, life insurance or already owners what offersGuarantees for the bank, and they have often lower charges because they no longer have dependent children ... But the back of the medal is that they are already banished, can have health problems resulting in cost of'higher insurance that can make them difficult to financial, and income that must be anticipated downward at the time of retirement, ”explains Sandrine Allonier, director of studies to.

Thus, from 55 years old, during a mortgage request, almost all of the banks request an estimate of the amount of retirement which will be paid, proof which must be made to his pension organization.Depending on the age of the borrower and his retirement date, they take into account either the full rate salary, or most often revenues at the time of retirement, to calculate the rate of'debt.

"A solution can also be the implementation of a bear loan, making it possible to lower the deadline of 30 % at the time of the transition to retirement and therefore to adapt its monthly payments to the decline in its income forKeep a comfortable standard of living despite everything, "completes Sandrine Allonier.Thus, a 57 -year -old woman with € 1,800 in net income was able to obtain a loan in terms of € 100,000, at 1.35 % over 20 years (+ 1.03 % insurance) with € 10,000 ofbring.The first monthly payments are € 620 insurance included until his retirement at 65, then will drop to € 425 when his income drops (agency Vousfinancer Grenoble).

My sweet'immo services

One of the major problems that we encounter with the borrowing of seniors is, that due to the much higher insurance rate, but also the fact that seniors borrow on shorter durations, the weight ofInsurance is such that the TAEG, an overall effective annual rate, exceeds the wear rate (2.52 % out of 10 to under 20 years, all costs included), maximum rate beyond which banks do not havethe right to lend.

"One of the major concerns that we meet when you want to finance seniors is exceeding the rate of wear: often they need a dry relay credits, or a short -term credit, withA high insurance rate ... The costs annexed to the credit therefore left for a short term, which strengthens its weight in the TAEG which often exceeds the rate of wear and therefore leads to a refusal of loan.In these cases, a solution may be to find a bank in which death insurance is optional and therefore not included in the calculation of the TAEG, "explains Sandrine Allonier.

Loan insurance, the main issue of borrowing seniors

If there is theoretically no limit age to subscribe to a credit, it is limited by the maximum age of loan insurance coverage.Most banks agree to cover the borrower in group insurance up to 75 years, the end of loan which theoretically allows to borrow from 55 years over a period of 19 years.With an insurance delegation, the coverage can go up to 90 years or even 95 years, end of loan ...

As an indication, overall on average and without surprise linked to a specific health problem, insurance rates for a credit over 10 years for a borrower of 50 years range from 0.40 % to 0.60 %, whileAt over 60, they reach double, between 0.80 and 1.20 %... In the current context of very low rate, the overall cost of insurance can then exceed the total amount of interest paid and represent untilat 60 % of the total cost of credit.

Example: 54 -year -old couple subscribing a loan of € 270,000 to 1.3 % over 20 years with group insurance at 0.946 % (on the remaining capital due, with constant deadline).

"One of the main subjects for seniors who wish to invest in real estate is that of loan insurance, because the more age we advance, the more the probability of having health problems increases and therefore the more insuranceis expensive ... In some cases of diseases, chronicles or not, the surprise is such that it is better to opt for funding without insurance when the bank allows, by taking another property in guarantee for example, or by only ensuring the spousethe youngest or healthy, ”advises Julie Bachet.

Example of recently funded senior files

What real estate purchasing power for retirees?

On average, according to figures recently published by the CNAV, in 2019 (latest data available), the amount of the French basic pension of the French having made all their career on the general scheme is € 10,64 against € 1091 in 2018 and1,086 euros 2017, with differences according to the sexes - that of men is 23 % higher than that of women (€ 1,232 against € 1,000, down for women), a difference that widens (15.6 %difference in 2018) - and regions.

This is how youfinancer calculated the borrowing capacity over 15 years with an average retirement pension per region and the property purchasing power associated with it (excluding insurance), with 10 % contribution to finance the costs."Borrowing with a basic retirement pension is today complicated in major cities, since a retiree alone can afford 6 m² in Paris, 12 m² in Lyon, 13 m² in Bordeaux, 20 m² Marseille and Nantes and Nantes and NantesAt best 57 m² in Saint-Etienne.Fortunately, at over 65, 75 % of French people are already owning their main residence ... but that confirms the fact that it is better to buy as soon as possible so as not to have it retired, and in theIdeal even no longer have monthly loan loads… ”, analyzes Sandrine Allonier.

Indeed, at 60, according to the data from Tousfinance, only 7 % of borrowers are first-time buyers, compared to 17 % between 50 and 59 years but 65 % for those under 30!

We note that in medium -sized cities, cities which often offer the best living environment for retirees, the purchasing power is fortunately much higher!Thus in Bourges or Limoges, you can buy 42 or 43 m² with an average retreat, 41 m² in Le Mans, 31 m² in Le Havre, 29 m² in Nîmes, a surface to be multiplied by two if we buy as a couple, with the same income.On the other hand, in more attractive cities like Nice, Cannes, Antibes or Aix-en-Provence where the prices are much higher, it will be necessary to be satisfied with 13 m² alone, or 26 m² in two ...

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