[Mise à jour du lundi 29 mai 2023 à 8h25] And four. The usury rate, or maximum APR at which banks are allowed to lend money, has again been revised. Wear rates applicable from June 1 to 30, 2023 have been published in a review published in the Official Journal of May 28, 2023. The usury rate is notably increased to 4.68% for fixed rate mortgages of 20 years and over, compared to 4.52% in May 2023 for this category of mortgages. That is a total increase of 0.89 points for this credit class in four months. The usury rate reaches 4.45% for home loans with a term of 10 to 20 years (fixed rate loans), compared to 4.33% in May 2023. More details on other applicable usury rates in June 2023 in the table below.
As a reminder, the revision of the rate of wear is now done every month from February 1 to July 1, 2023, and no longer every quarter, as was the case until then. This temporary monthly payment of the usury rate must make it possible to “maintain the objective of protecting borrowers that the usury rate has, while avoiding a situation where the usury rate would become a factor in the rationing of the supply of credit”, assured Bercy on January 11. Borrowers find themselves caught in a vice between the usury rate, originally designed as a shield against abusive bank rates, and the increasingly high rate grids of banking establishments. The latter are indeed forced to increase their rates, because they have to pay more to refinance themselves with the ECB, which responds to the surge in inflation by raising its key interest rates.
This faster updating of the rate of wear and tear should thus allow candidates for the purchase whose file was blocked for this reason to finally obtain their mortgage. Because this is indeed a faster update, and not a change in the calculation method: the formula for calculating the rate of wear, defined by law, does not change. The usury rate is always calculated taking into account the average of the rates charged by banking establishments during the last quarter.
What is the wear rate?
The usury rate, also called “usury threshold” is defined as the maximum annual percentage rate (APR) at which a loan can be granted to an individual by a credit institution. Any loan offered at a higher rate is considered usurious. The wear rate is governed by article L314-6 of the Consumer Code. It is set up by the State in order to protect borrowers from possible abuse by banks and credit institutions.
The rate of wear depends on the type of loan, the amount and the duration of the loan. A distinction is made in particular between consumer loans and real estate loans. For example, real estate loans and loans for works of an amount greater than 75,000 euros are divided into five categories:
- Fixed rate loans with a term of less than 10 years;
- Fixed rate loans with a duration between 10 years and less than 20 years;
- Fixed rate loans with a term of more than 20 years;
- Variable rate loans;
- Bridging loans.
To calculate the wear rate of a certain category of loan, the Banque de France takes the average effective rate charged by credit institutions for a quarter, and increases this rate by a third. The figure obtained constitutes the wear rate for the following quarter.
What is the attrition rate in 2023?
For example, the average effective rate charged in March, April and May 2023 by credit institutions for mortgage loans over a period of 10 to 20 years was 3.34%. Consequently, the wear rate for these same loans from June 1 to 30, 2023 is 4.45%.
| Average effective rate practiced during the last 3 months | Wear rate applicable on JUNE 1, 2023 | |
|---|---|---|
| Fixed rate loans with a term of less than 10 years | 2,99% | 3,99% |
| Fixed rate loans with a term between 10 years and less than 20 years | 3,34% | 4,45% |
| Fixed rate loans with a term of 20 years and more | 3,51% | 4,68% |
| Variable rate loans | 3,35% | 4,47% |
| Bridging loans | 3,5% | 4,67% |
When is the wear rate updated?
Historically, the wear rate is published in the Official Journal by the Banque de France at the end of each quarter for the following quarter. It is also displayed in the “Rates and prices” section of the “Statistics” category of the Bank of France website. The wear rate is detailed for all loan categories. The wear rate is temporarily revised every month from February 1 to July 1, 2023, in order to take into account the inflationary context and to unblock the situation of real estate borrowers whose credit application file could find themselves stuck between the rates taken taken into account for the calculation of the wear rate and the current market rates.
Who sets the wear rate?
The usury rate is set by the Banque de France, which is the central bank of France. Indeed, the Banque de France has monetary, financial and economic missions. Among the services to the economy, we find in particular the protection of households against over-indebtedness. Part of the Banque de France, the Prudential Supervisory and Resolution Authority (ACPR) monitors banking and insurance activity.
In the eyes of credit institutions, some borrowers present an increased risk of default. This is the case for the elderly or certain people practicing a risky profession. The interest rate applied to them then exceeds the usury rate, and the bank refuses to lend money. To avoid this overrun and be able to benefit from a loan, it is possible to play on the TAEA (annual effective rate of insurance) by taking out less expensive borrower insurance in a different establishment.
Penalties for exceeding the wear rate
Article L341-50 of the Consumer Code provides for penalties for credit organizations that exceed the usury rate. Usury is punishable by a 2-year prison sentence and a fine of 300,000 euros. The conviction may be accompanied by other sanctions, such as the prohibition to exercise certain professional activities for a maximum period of 5 years.
- Legifrance:
2023-05-29 07:55:09
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