Credit institutions will henceforth be allowed to charge less in handling fees when people take out a mortgage loan.
The Council of Ministers has decided to further lower the legal cap on the file fees that credit institutions can charge when taking out mortgage loans, such as a home loan. Based on the proposal by Economy Minister Pierre-Yves Dermagne, which was approved by the ministers, the ceiling has been capped at €350, instead of the current ceiling of €500.
"The fees are too high and make it more difficult for people to acquire their own homes. They are also extra disadvantageous for borrowing smaller loans because they are lump sums," said Dermagne.
This is not the first time the government has put a cap on file fees. The last time it did so was in 2017, after the Prices Observatory found that since 2014, credit institutions raised the price of taking out a home loan by around 50% on average, from €320 to €479, for no apparent reason.
A ceiling of €500 was therefore imposed for different types of mortgage loans, but according to Dermagne, action was once again needed as all credit institutions have raised filing fees to to this legal maximum.
Meanwhile, there has been a strong digital evolution in banking services over the past 10 years, and customers are often expected to provide their own data online, only then to start the process of taking out a loan.
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The fact that people are increasingly banking online means institutions are reducing their branch network and services. "However, the reduction in costs that this entails is not passed on to the consumer, quite the contrary," Dermagne said. "A file cost of €500 is not justified, so further action was needed."
This will also have an impact on the file fee for a refinance with the same lender, as it may not exceed half the application fee for a new contract.
