The own contribution and Loan-To-Value (= the ratio of a loan to the value of an asset purchased) are important elements for lending, but certainly not the stumbling block for granting a higher credit. Although it is often thought that creditors can only lend up to 80% LTV, this is not the case. It is true that the National Bank of Belgium developed LTV to be able to cope with a possible overevaluation of the housing market. These determine that a creditor can, in principle, lend up to 90% LTV for those who buy or build a house for personal use for the first time. However, in up to 35% of the cases the LTV can reach 100% (and even more than 100% in 5% of the cases).

The most important stumbling block to grant higher credits is, however, the repayment capacity. If the repayment capacity is insufficient to justify a higher credit amount, a credit with a higher LTV can’t be granted, to avoid that the borrower possibly ends up in a too high debt mountain. This is also important for healthy lending.

Moreover, the, otherwise rightful, measures to meet the international standards by 2050, often increase the amount to be financed for the purchase of a home. The sector provides some solutions for this issue. Creditors partially try to absorb this increase by granting loans with a term longer than 20 years and by offering cheaper loans for energy renovations. Furthermore, “green” consumer loans for solar panels or a heat pump are also among the possibilities and the housing market adapts itself by reducing the prices for houses with a bad EPC.

A possible interesting measure could be the use of the mobility budget, a part of the remuneration package, for the repayment of the mortgage loan or the payment of the rent, rather than for a car. As this budget is granted together with the salary, it can have a positive impact on the repayment capacity. The recent decision of the Flemish government to introduce a government guarantee on the part of the mortgage loans above the loan-to-value of 90% may also be helpful. Once all the details are known, we will further examine this proposal in the sector to limit the administrative costs of this guarantee as much as possible in consultation with the government.

Furthermore, other possibilities can be explored to make the transition to a more sustainable housing market a “just transition”, in which every one of the society can participate. In fact, a part of the society doesn’t dispose of the necessary means to carry out energy renovations or to take out a loan to do so. The suitable instruments are therefore necessary to transcend these constraints as much as possible. This could be made possible by introducing adapted government guarantees for mortgage loans, that give citizens with a limited own contribution the chance to borrow, and at the same time provide more certainty to creditors.

The EPC certificate plays an increasingly important role for buying or renovating a house. Together with the government, we are further committed to ensure the quality of EPC certificates: the EPC certificates need to become more transparent and creditors have to gain access to the EPC databases in an automated manner. It is clear that the EPC score is a very important parameter to measure energy efficiency and the importance of EPC certificates is constantly increasing. Creditors in fact base themselves more and more on the EPC to assess loans and to inform customers about the possible obligations that an EPC score entails.

The sector is therefore a requesting party to associate quality criteria with the certification.  Thanks to a digital access to the EPC databases, authentic data of the EPC certificates can be requested without any risk of mistakes or falsification and the certificates can be linked to credit agreements. In this regard, the authorisation to save the requested information in the intern files during the term of the loan is necessary.