Mortgage loans are more expensive than expected at some Belgian social lenders. A survey by the consumer organization Spin Lender, about which the Belgian newspaper De Morgen reported, shows that in many cases the interest with social lenders is even higher than with the ordinary bank.
Social loans in Belgium are not always “social”.
In March, the study requested rates from the social loan providers in the Flemish and Brussels regions. These data showed that some institutions use higher rates than the traditional bank and that there are large differences in rates among companies. The Belgian newspaper De Morgen writes: “The low-income families who assume that they already borrow cheaper from a social credit company than from the bank will be disappointed”.
Social lenders grant social loans for buying, building or keeping a modest home. There are two types of credit companies, the subsidized and the non-subsidized. Across Lender is a lender that is not subsidized by the government and recognizes the problems. Employee Erik Peeters: “Yes, we receive complaints from dissatisfied borrowers, but we cannot do anything about it. For our rates, we depend on politics. The Flemish government leaves the social credit companies out in the cold. We often have her there pointed out. “
Long term loans
For a loan of 100,000 USD over twenty years, Across Lender is more than 39,000 USD in repayments more expensive than the subsidized Flemish Housing Fund. It could be even more extreme: The Brussels social credit company Petit Propriétaire is even more than USD 47,500 more expensive than the Flemish Housing Fund.
Spin Lender wants the regional governments to quickly end the tangle of social loans. “Such huge differences cannot be justified. The social loans are not always social and miss their target,” said financial expert Yves Evenepoel of Spin Lender. “The problems are not there today. We have been getting complaints about social loans for twenty years.”
At the end of last year, the political party New Flemish Alliance (N-VA) already argued for a merger of the Flemish Housing Fund, the Flemish Society for Social Housing and companies such as the Across Lender. Flemish minister Freya Van den Bossche (Energy, Housing, Cities and Social Economy) emphasizes that this reform has been approved by the Flemish government and that centralization has been initiated at Flemish level.