Lending institution
The bank or credit organization that grants and carries the loan, bears default risk and issues the offer. Each institution has its own risk policy, rate grid and acceptance criteria, which is why the same file can receive very different answers. Putting these policies into competition is the core of the broker's job.
Key points
- Each lending institution has its own risk policy determining its acceptance criteria.
- Rate grids vary according to commercial strategies, market periods and targeted profiles.
- The same file can be accepted, rejected or counter-proposed differently depending on the bank approached.
- The institution bears the credit risk for the entire term of the loan.
Frequently asked questions
Why do terms vary so much from one lending institution to another?
Each bank steers its lending output according to commercial objectives, its refinancing cost and its appetite for certain profiles (first-time buyers, investors, high earners). At any given moment, some banks are trying to attract profiles they are under-representing on their balance sheets and may therefore offer very competitive rates for those clients. This dynamic shifts regularly, which is why systematic competitive comparison is valuable.
How does a broker choose which lending institutions to approach for a file?
The broker matches the borrower's profile (income, stability, deposit, property type) with their knowledge of each partner's current risk policies. Some institutions are more open to self-employed borrowers, others to buy-to-let investors, others still to first-time buyers with limited deposits. This targeting expertise is one of the key skills an individual cannot replicate alone.
What is the difference between a lending institution and a guarantee organization?
The lending institution grants the credit and holds the claim. The guarantee organization (surety company or mortgage body) covers repayment in case of borrower default, protecting the bank. These are two distinct entities, even if some institutions have their own subsidiary guarantee company. The cost of the guarantee adds to the total credit cost.
In practice
For a senior executive's file with a 20% deposit on a €400,000 property in the Paris region, a broker identifies that two banks are currently running commercial campaigns targeting this profile and secures offers with 0.15 percentage points lower than the client's own bank's proposal.
Official sources
- The banking-operations intermediary (IOBSP) · ABE Info Service (Banque de France / ACPR)
- Single register of intermediaries · ORIAS