five tips to know to get around the usury rate and finally get your loan

Wear rate. This is a term that has been on everyone’s lips – at least on those of candidates to purchase real estate – since this summer. Because if its primary objective is to protect borrowers against the practice of abusive rates by lenders, the usury rate today blocks access to financing for some of them.

The usury rate refers in fact to the maximum annual percentage rate (APR) at which banks are authorized to lend money. The side effect it has produced lately is due to its calculation method, which has been hammering home mortgage brokers for several months. To calculate it and update it on a quarterly basis, the Banque de France follows a method defined by law on the basis of the rates applied by the banking institutions in the previous three months.

The problem is that in a period of galloping inflation like the one we are experiencing, the banks are rapidly increasing their rate programs, to match their violins to those of the European Central Bank. Which, to counter the surge in inflation, is gradually raising its three key rates. (More details in our dedicated article.) Consequence? Borrowers are caught between, on the one hand, the maximum interest rates at which they have the right to borrow and, on the other, the increasingly high rates charged by banks, which are also forced to pay more and more for refinancing. .

The number of bank loans granted in 3And quarter of 2022 is down 28% compared to the same quarter of the previous year

Consequently, the number of bank loans granted to the 3And quarter of 2022 is down by 28% compared to the same quarter of the previous year, according to the latest Crédit Logement / CSA Observatory. The fault of the usury rate, but not only, nuance Crédit Logement: “Constraints to adjust their rate (parameter of the usury rate) and respecting the HCSF recommendations on duration and personal contribution, banks have limited their offer to categories customers by enabling them to ensure their profitability. ”(Click here for more information on the latest Real Estate Credit Observatory / CSA).

If it is not possible to borrow at a rate higher than the usury rate calculated by the Banque de France, it is still possible to lower its APR, so that it gets into the nails. Here are our tips.

Play on the borrower’s insurance

The borrower’s insurance accounts for a substantial portion of the total cost of the mortgage. Let’s take the example of a € 250,000 loan taken out over 20 years. With an insurance rate of 0.34%, which is the rate displayed by default in the broker’s monthly payment estimation tool Meilleurtaux, the borrower’s insurance represents 17,000 euros. That is 22% of the total cost of the loan, which reaches 79,128 euros (calculated on the basis of the average interest rate of “good” practices of 17 October 2022). (Click here for the salary to earn to borrow 250,000 euros.)

So don’t hesitate to compete when your bank offers you the home insurance contract in order to reduce the cost of the borrower’s insurance and ultimately your APR. To find the most interesting offer for you, you can contact banks or insurance networks directly or go to a broker. Many of them offer online comparators for you to use their services.

Another trick if you borrow two: play on the insurance fee. By default, you will be offered a 100% share each, but you can also opt for a 50% share. If we take our example of a home loan of 250,000 euros, if it is contracted as a couple, then up to 125,000 euros will be covered each. In the event of the death of one of the two policyholders, the survivor will have only his / her share of the claim to be paid.

Negotiate tuition fees

Remember to negotiate the registration fee. The latter enter into the calculation of the APR, and obtaining a discount on their amount can allow you to claim a loan rate lower than the usury rate.

Borrow at the right time

In the loan application procedure you must provide the last 3 payslips if you are an employee (or your last 3 financial statements if you are a merchant, craftsman, freelancer, etc.) as well as your bank statements for the last 3 months. If you manage to apply for your loan after paying a bonus and / or getting an annual raise, you increase your chances of moving up to the higher rate grid. Enough to go from “good” to “very good”, for example. This way, you will be entitled to lower interest rates than you could have benefited from a few weeks earlier.

Increase your personal contribution

The bank will generally ask you for a personal contribution of 10% to grant you the loan. To take the example of our € 250,000 loan, this means that you will have to submit a personal contribution of € 25,000. If that’s your thing, increasing the share of your personal contribution and bringing it to 20 or even 30% of the loan amount requested can drastically lower the interest rate the bank will be willing to grant you, as you decrease the amount to be taken in. loan. While this is the most obvious solution, it is also the most difficult to implement.

Borrow for a shorter period

Again, you need to have the means to use this trick. But borrowing for a shorter period automatically leads to a drop in the interest rate. The counterpart is that the monthly payments to be repaid will be higher. Your level of resources must therefore be sufficient to allow you to stay below the 35% debt limit, including the borrower’s insurance.

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