2023-11-29 15:02:22
From this Friday, December 1, 2023, the maximum authorized usury rate (APR) for fixed-rate property loans of 20 years or more will exceed 6% in France. The usury rate, also known as the “usury threshold,” refers to the maximum annual percentage rate (APR) at which a financial institution can provide a loan to an individual. Any loan with a higher rate is considered usurious.
The upward trend in the wear rate is therefore confirmed. This Wednesday, November 29, the Official Journal reveals that the new usury rates will increase further. Indeed, from December 1, the ceiling rate will reach 6.11% for property loans over 20 years or more, an increase of 0.20 points over one year.
The symbolic bar of 6% is thus exceeded for the first time since 2010. This new increase is considered good news “for borrowers”, as long as “ banks can lend once more while generating profitability on the credits granted », Explains Julie Bachet, general manager of the broker Vousfinancer.
Other rates over shorter periods have also increased. The new usury rates reach 4.40% for property loans lasting less than 10 years. They will be 5.80% for those whose duration is between 10 and 20 years, and 6.17% for bridging loans.
The usury rate impacted by credit rates
It must be said that in concrete terms, these rate increases suit French people interested in real estate loans. “ The rapid rise in usury rates in recent months has led to a reduction in loan refusals thanks to these ceiling rates”rejoices Julie Bachet.
It should also be noted that this increase in usury rates is a consequence of the increase in credit rates. Rates which reached 4.30% for loans over 20 years. For the coming months, these rates will have to stabilize, says the governor of the Bank of France, François Villeroy de Galhau. The latter announced, at the beginning of November, that the key rates of the European Central Bank should no longer increase, “ except surprise ”, due to the slowdown in inflation.
You should know that since February 1, 2023, the wear rate has been updated monthly instead of the usual quarterly rate. This modification aims to maintain the protection of borrowers, while preventing the usury rate from restricting the supply of credit. Bercy explained in January that this measure aimed to give borrowers some breathing room in the face of the precarious balance between the usury rate, designed to prevent excessive rates, and the increasing rates of banking establishments. The latter being impacted by higher refinancing costs following the key rates raised by the ECB to counter inflation.
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