2.60%, maximum, for loans with less than 20 years and 2.57% for mortgages over 20 years. These rates are the wear and tear rates, all inclusive, including insurance. Banks are prohibited from lending over! These thresholds will increase on October 1st. But the Banque de France warns: this increase will be that of the usual calculation formula. Don’t expect an additional boost.
Some have proposed an exceptional increase in this usury rate: in the face of insistent requests from various real estate professions – in particular credit brokers but also some banks and notaries, in particular – this time the Governor of the Banque de France Franois Villeroy de Galhau replied. very precisely, this Friday, September 16 on RTL, on the plans of the monetary institution: What we will do at the end of this month is apply the existing rules who will drive to proportional increase of this maximum rate.
The Governor of the Banque de France thus dampens the hopes of those who awaited a further gesture: the Bank of France it is in fact, in the texts, the the only body that can derogate from the usual rule for calculating the usury rate. The quarterly calculation rule will therefore apply from 1 October.
Low reactivity of the calculation formula
This threshold, in fact, will thus increase significantly, by mathematical effect: the Banque de France calculates the average of the tied loans in the banks in the 3rd quarter of 2022. To calculate it quarterly average effective ratetakes into account the effective annual rate (APR) of the credit: a rate that integrates both the cost of credit but also administration fees, commissions and fees paid to intermediaries, monthly payments of the borrower’s insurance and even bank charges if the contract provides for the opening of an account. In the 2nd quarter, this all-inclusive average rate – which therefore refers to loans already disbursed – was 1.93% on real estate mortgages over 20 years old., the category that currently accounts for two thirds of loans. Therefore the Banque de France adds a third this average rate: 2.57%, therefore, for the wear rate on loans over 20 years old.
A quarterly calculation method that induces a weak reactivity in the face of a strong and rapid rise in real estate rates, as repeated by brokers – who retransmit the rate grids currently practiced by banks, for those who have not yet obtained their credit – but also the Crdit Logement-CSA observatory, which, like the Banque de France, is based on loans already granted.
Real estate credit: in September special offers on rates, it’s over
The increase will be quite marked, Bercy promises
Impossible to guess what the October 1st increase will be, but the mathematical increase of 1 October will be quite markedthe Minister of Economy and Finance assures us. [Ce relvement proportionn] will allow resolving cases of access to real estate credit more difficult than there has been in recent weeksespecially for heavier borrowersassures the governor of the Banque de France, on RTL.
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Will this mathematical increase appear sufficient for real estate professionals who request a usury rate intervention? Probably not. Because they were hoping for an extra boost, and Franois Villeroy de Galhau clearly hinted at RTL that the Banque de France will not deviate from the usual formula.
However, this calculation method based on the credits issued in the previous quarter and the fact of taking into account an all-inclusive rate explain why the usury threshold currently blocks so many contracts. The Governor of the Banque de France implicitly acknowledges that older borrowers may have seen their applications rejected due to the usury rate being exceeded, which is explained by higher loan insurance rates for older borrowers (e.g. over 45).
Bercy claims it is currently running negotiations with banks, brokers and other real estate professionals on the issue of the usury rate and its adjustment. But it is not a question of revolutionizing the functioning of wear: Bercy is attached to the protection aspect and the fight against over-indebtedness of this rate. An argument that Franois Villeroy de Galhau did not fail to resume this Friday on RTL: the usury rate is a maximum rate established to protect borrowers.
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