Calculated quarterly since the beginning of the year, the rate is beginning to decline. As of July 1, it will be 6.16% for loans over 20 years or more.
The Banque de France has announced the first decline since 2021 in the usury rate for 20-year mortgages, reflecting the decline in rates charged by banks over the last three months. “The usury rate applicable to fixed-rate household mortgages of 20 years and over is falling by 23 basis points (0.23 percentage points, Editor’s note). From July 1 to September 1, the usury rate will be 6.16% against 6.39% for the second quarter”, indicates the Banque de France in a press release.
This is the first decline since 2021 in the usury rate of this category of real estate loans, which represents more than two thirds of the production of new loans, and we have to go back to April 2017 to find a drop of the same magnitude, adds the text. The average rate of real estate loans, all durations combined, fell below 4% in the first quarter, to 3.99%, according to data from the CSA/Crédit Logement Observatory.
Updated monthly in 2023
Usury rates are ceiling rates set by the central bank based on the rates applied by banks over the previous three months. They aim to protect the borrower against over-indebtedness. This rate caps in particular all the costs of a property loan: credit rate applied by the bank, possible broker commission, borrower insurance.
Calculated every quarter, usury rates were in 2023 updated monthly, with banks and brokers judging the previous system too slow to adapt to the rapid tightening of monetary policy. The monthly calculation of usury rates, intended to support the increase in interest rates orchestrated by the European Central Bank (ECB), “allowed banks to better support the rise in rates and gave them more room for maneuver. wide to adjust their scales”, the Banque de France indicated at the end of 2023, announcing the return to a quarterly calculation.