WEAR RATE. The increase in the usury rate continues in 2023. Since Wednesday, March 1, banks can lend up to 4%, compared to 3.79% last month. Here are the consequences.
[Mis à jour le 1er mars 2023 à 08h11] Now revised every month by the Banque de France, the wear rate is changing once again this Wednesday, March 1, 2023 to reach 4%, against 3.79% last February (for a fixed rate loan over twenty years). This 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 home loan. Good news for borrowers, this new measure should allow banks to grant more credit. In summary, the banks will be able to adjust their trade policy and release funds that are currently locked. But the flip side of the coin lies elsewhere. If it will be easier to borrow, the cost of credit will be higher. Indeed, this operation could contribute to a certain sharp rise in rates. Currently, the average rate of a loan over twenty years has reached 2.9% against only 1% in February 2022. A trend that is not ready to be reversed.
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 | Attrition rate as of February 1, 2023 | Attrition rate as of March 1, 2023 |
| Fixed rate loan < 10 years | 3.53% | 3.67% |
| 10 to 20 year fixed rate loan | 3.71% | 3.87% |
| Fixed rate loan > 20 years | 3.79% | 4% |
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.