WEAR RATE. The formula for calculating the wear rate has evolved. From now on, the rate will be calculated monthly, and no longer per quarter. Explanations.
[Mis à jour le 8 février 2023 à 15h01] The usury rate makes it possible to define the maximum legal rate at which banks and credit institutions are authorized to practice when they grant you a loan. home loan. And since the February 1, 2023, the formula for calculating this wear rate has changed. Now the rate is updated every month by the Banque de France, and not by quarter, as was the case until then. Good news for borrowers, this new measure should allow banks toto agree more credits. In summary, the banks will be able to adjust their trade policy and release funds that are currently blocked. But the flip side of the coin lies elsewhere. If it will be easier to borrow, the cost of credit will be higher. Today, the wear rate of fixed rate mortgages over 20 years is set at 3.79% for the month of February 2023.
Above all, the usury rate makes it possible to protect a borrower against excessive rates that could be offered to him by various credit institutions. In other words, it makes it possible to avoid situations of over-indebtedness serious for an individual, and on a larger scale, the destabilization of the global economy. It therefore plays a regulatory role. It applies to home loans as well as consumer loans, account overdrafts, or revolving loans.
| Type of loans | Average rate in the 4th quarter of 2022 charged by credit institutions | Attrition rate as of February 1, 2023 |
| Fixed rate loan < 10 years | 2.56% | 3.53% |
| 10 to 20 year fixed rate loan | 2.65% | 3.71% |
| Fixed rate loan > 20 years | 2.68% | 3.79% |
It is the Banque de France which sets the rate of wear. It is based on the average effective rates charged 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).
In 2022, the evolution of the real estate market is more than doubtful and uncertain. Since the beginning of 2022, interest rates have been rising faster than this famous rate of wear. De facto, many mortgage applicants are denied their loan application. A study ofOpinion Systemcommissioned by the French Association of Bancassurance Intermediaries (AFIB) even affirms that since January 2022, this increase in the wear rate is responsible for the refusal of 45% home loan applications from the banks. This is why some professionals in the sector are asking for a change in the method of calculating the wear rate by increasing by two thirdsinstead of a third.