bad news, 20-year usury rates drop on April 1

The usury rates in effect for the second quarter of 2022 have just been published in the Official Gazette. And they have been down compared to last quarter for loans for over 20 years. This makes accessing a mortgage a little more complicated for some families.

Rising mortgage rates and falling usury rates: The news isn’t necessarily good for families looking to take out long-term loans. Posted in Official newspaper from March 28, the attrition rates in effect from April 1 for the second quarter of the year are in fact slightly down compared to the previous quarter. While mortgage rates are on the rise, this could create a detrimental scissor effect for some households, according to broker Vousfinancer.

We remind you that usury rates are set every 3 months by the Banque de France and designate the maximum rate beyond which a bank cannot grant loans. They are calculated by increasing the average annual percentage rate (APR) applied by banks in the previous quarter by one third.

More difficult loans

From 1 April 2022, usury rates have increased on short maturities (from 2.4% to 2.43% for loans between 10 and 20 years). By contrast, the usury rate for loans over 20 years continues to decline and has reached 2.40%. A decrease of 0.01% compared to the first quarter 2022 (2.41%), but 20 points compared to the same period a year ago (2.60% in the second quarter of 2021).

Usury thresholds for home loans

  • Fixed-rate loans of less than 10 years: usury threshold of 2.51% from 1 April 2022 (compared to 2.44% in the first quarter of 2022)
  • Fixed rate loans from 10 to 20 years: 2.43% (vs. 2.4%)
  • Fixed rate loans of 20 years and over: 2.40% (compared to 2.41% in T12022)
  • Floating rate loans: 2.32% (vs.2.33%)
  • Relay loans: 2.87% (compared to 2.88 at T12022)

Usury thresholds for consumer loans

  • Loans up to € 3,000: usury threshold of 21.11% as of April 1, 2022 (compared to 21.17% in the first quarter of 2022)
  • Loans of between € 3,000 and € 6,000: 9.85% (versus 9.8%)
  • Loans over 6,000 euros: 4.93% (stable compared to T12022)

The rise in credit rates combined with the decline in usury rates therefore risks, at least for the next three months, making it more difficult for some families to access mortgages, worries Vousfinancer

The credit broker gives this example: a pair with 45,000 euros of income per year, those wishing to borrow 200,000 euros over 20 years with a 10% deposit will have their loan application rejected. In fact, with a rate offered in a large national bank of 1.95% in 20 years, plus an insurance rate of 0.30% (on the initial capital, 50% on each item), the APR will be 2.70%. . Or a rate higher than the current usury rate, 2.40%. However, this pair’s leverage ratio is only 28%, well below the 35% high.

Usury rates are currently totally out of touch with reality of the market, in a press release the judge Sandrine Allonier, director of studies at Vousfinancer. As evidence, over 20 years and more, the most common credit terms, the usury rate has decreased by 20 points in one year, even as the credit rates have increased by 15 points. In April 2021, we borrowed an average of 1.25% against 1.40% today, with a usury rate currently lower. It is therefore understandable that today many borrowers are effectively excluded from credit.

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