USAGE FEE. In a context dominated by difficulties in accessing credit, the governor of the Banque de France confirmed that the usury rate will be raised next month. As a reminder, it corresponds to the maximum rate at which banks and other credit institutions can lend money.
[Mise à jour du vendredi 16 septembre 2022 à 12h03] Will access to real estate credit be eased at the end of the year? As the number of rejected loan requests increases dramatically, the governor of the Banque de France has confirmed the increase in the attrition rate on October 1, at the microphone of RTL this Friday. “What we will do at the end of this month is to apply the existing rules that will lead to a well-proportioned increase in this ceiling fee,” he explained. To recall, the usury rate corresponds to the maximum rate at which banks and other credit institutions can lend money, according to the average of loans linked to banks in the third quarter of 2022.
“This will make it possible to solve the most difficult cases of mortgage access,” said the governor of the Banque de France. Until now, many players in the real estate sector, including brokers, have denounced the lack of responsibility of this instrument, decorrelated by the increase in real estate rates observed in recent months, and preventing access to credit for certain driver profiles. The October 1 math increase will be “quite marked”indicates the Ministry of Economy and Finance, cited by the site MoneyVox.
What is the usury rate? Definition
The rate of wear (a term also found in the form “rate of wear”) designates the annual percentage charge (APR) maximum to which banks and other credit institutions can lend money in France. It includes the basic interest rate, fees and insurance premiums for borrowers. There is an interest rate for each of the different loan categories defined by the Banque de France (fixed-rate housing loans with a duration of less than 10 years, cash loans to families and work loans for an amount less than or equal to 3000). euros, etc.). Set by the Banque de France by increasing by a third the effective average rates applied by financial institutions, the various usury rates are published in the Official Gazette at the end of each quarter, and serve as a legal threshold not to be exceeded. the next quarter.
What is the interest rate in 2022 for a mortgage? What does the Banque de France say?
As indicated above, there is not only one current usury rate, but several (one for each loan category defined by the Banque de France). For instance, the usury rate applicable on July 1, 2022 for a “fixed rate mortgage with a term of 20 years or more” is 2.57%. You can find all updated usury rates on the Banque de France website.
As an individual, it is possible to avoid the overrun of the usage rate by a lending institution by outsourcing borrower insurance (which in particular represents a large part of the cost of a mortgage) included in the credit offer. Facilitated by the Lagarde law and now by the Lemoine law, the fact of choosing mortgage insurance with a specialized insurance company, instead of the group contract offered by the bank, can allow you to lower your loan rate to a lower level than that of the usury rate.
A change in the number of monthly payments of the loan can also sometimes lead to a decrease in its APR, and thus allows you to circumvent the interest rate. On the other hand, professionals do not have the right to circumvent the usury rate, under penalty of risking a prison sentence of 2 years and a fine of 300,000 euros, according to article L341-50 of the Code of the Consumer.
Loan rejection and interest rate, how does it work?
Loan rejections linked to an overrun of the usury rate are therefore often encountered in the application for a mortgage. These refusals concern in particular loans that present, in the eyes of financial institutions, risks in terms of repayment (elderly, people with a serious medical history, etc.). When the lending institution calculates the total cost of credit for these people, the resulting APR can sometimes be higher than the interest rate, and the loan offer cannot be legally sent to the applicant.