WEAR RATE. An increase in the wear rate was recorded from September 1, 2023. Here are the consequences.
The usury rate has once again been raised by the Bank of France. From September 1, 2023, banks will now be able to offer a mortgage loan over 20 years or more at a maximum rate of 5.56%. This ceiling has continued to increase for several months and is also increasing on all other types of credit that banking establishments can grant. The main effect of this decision is to make the cost of credit higher for borrowers and, therefore, to reduce their borrowing capacity. Above all, while the gradual increase in the usury rate was intended to broaden access to credit – banks protecting themselves more with the increase in interest – this does not seem, at this stage, to bear fruit since the number of credits granted is constant, or even decreasing.
The usury rate is the maximum legal rate at which a loan can be taken out. Above all, it protects a borrower against excessive rates that may be offered to him by various credit institutions. In other words, it makes it possible to avoid situations of serious over-indebtedness for an individual, and on a larger scale, the destabilization of the global economy. It therefore plays a regulatory role. It applies to real estate loans, consumer credits, account overdrafts, or revolving credits.
| Cash loans to households and loans for works of an amount less than or equal to 75,000 euros | Rate as of September 1 |
| Loans of an amount less than or equal to 3,000 euros | 21.61% |
| Loans of an amount greater than 3,000 euros and less than or equal to 6,000 euros | 12.01% |
| Loans of an amount greater than 6,000 euros | 6.85% |
| Real estate loans and loans for work in an amount greater than 75,000 euros (2) | |
| Fixed rate loans with a duration of less than 10 years | 4.23% |
| Fixed rate loans with a duration between 10 years and less than 20 years | 5.28% |
| Fixed rate loans with a term of 20 years or more | 5.56% |
| Variable rate loans | 5.13% |
| Bridging loans | 5.53% |
It is the Banque de France which sets the usury rate. It is based on the average effective rates practiced by credit institutions increased by a third. The thresholds vary according to the amount borrowed, the duration of the loan and the category of loan chosen (consumer credit or revolving credit for example).
