The brokers ended up (partially) winning their case. For months, they have been asking for a revision of the calculation of the usury rate in order to facilitate access to credit for individuals. They have been heard. The Bank of France has indeed announced this Friday, January 20, to propose “a monthly adjustment, for a limited period”, of these ceiling borrowing rates intended to protect the purchaser from abusive credit conditions, from February 1 and until February 1.
A decree will be published next week by Bruno Le Maire in order to allow the entry into force of this measure, specified this Friday afternoon the Minister of the Economy in a press release, thus confirming this monthly payment of the revision of the rate of ‘wear.
The usury rate was until now calculated each quarter by the Banque de France, which takes an average of the rates charged by the banks over the last three months, increased by a third. In order to smooth out the increases in the wear rate and to have “a finer adjustment during the months to come”, notes the Banque de France, the calculation will therefore be done every month until July 1, 2023. This rate of wear has been set since January 1, 2023 at 3.57% all costs included for a loan of 20 years and more.
The wear rate caps all the costs of a home loan: credit rate charged by the bank, any brokers’ commission, borrower insurance. Its method of calculation is now an obstacle for many buyers, as players in the real estate sector have regretted for months.
Since the spring of 2022, interest rates have indeed risen in the wake of the key rates of the European Central Bank and have increased faster than the usury rate. For brokers, this wear rate is largely responsible for the drastic drop in the number of loans granted to individuals wishing to acquire a home. Over the whole of 2022, the number of loans granted has indeed decreased by 20.5% compared to the previous year, the CSA / Crédit Logement observatory revealed on Tuesday.
“It will give a little oxygen”
Reached by L’Express, Maël Bernier, spokesperson for Meilleurtaux.com, believes that this announcement is “good news” which “goes in the direction of what we have been asking for months”. Damien Raquidel does not say anything else. “It will give a little oxygen. But it does not mean that we will witness a drastic opening of the market”, advances to L’Express the general manager of ConnectCredit.
The monthly update has “significant advantages” for future borrowers, welcomes his side Cécile Roquelaure, director of studies at Empruntis. Indeed, “banks will be able to price credit at its fair price, and therefore start lending again or lend more”. In other words, “access to credit will normalize on a monthly basis, which will allow a gradual restarting of the market”. This decision can make it possible “to hope for the limitation of the extension of the durations, even the limitation of the number of files acceptable by the banks”.
For Bruno Le Maire, this monthly payment for the revision of the wear rate is “a balanced solution which makes it possible to maintain the protective calculation formula for wear rates, while smoothing their evolution over time according to that of observed market rates”. According to Maël Bernier, the monthly revision of the calculation of the wear rate will make it possible to better take into account “the reality on the ground and market data”. “It’s the end of an aberration: for six months, we have been refusing loans to French people who are nevertheless able to buy”, observes the spokesperson for Meilleurtaux.com.
The Banque de France disagrees. According to the institution, “banks have continued in recent months to serve borrowers of all age and income groups and for all acquisition reasons, confirming the absence of market blockage”. Similarly, real estate credit would be in France “the most abundant, the cheapest and the surest of the major European countries”, assures the independent institution.
Folders unlocked when raising the wear rate
But it recognizes all the same that the quarterly revision of the wear rate leads to an imbalance in the distribution of credits. “The Banque de France was able to observe, particularly in the last months of the year, variations in the distribution of credit distribution, with a threshold effect within each quarter, she explains. in a press release. Some cases, pending the next significant quarterly increase in the attrition rate, are thus postponed to the beginning of the following quarter.”
This was the case in October and January, during the two previous increases in the usury rate. Several files, on hold, were able to obtain a loan a few days after this increase in the wear rate, before the floodgates closed. “We were able to unblock all the files during the first fifteen days of January, but the banks then proceeded to raise their rates. We therefore find ourselves in the same situation for new files”, explains Damien Raquidel. “The call for air was very quick in January. The files were unblocked during the first 10 or 15 days but they are blocked again”, abounds Maël Bernier.
From now on, future buyers looking for credit will “only have to wait a month, so we will manage to temporize”, observes Damien Raquidel. “Making a client wait three months for his file to pass was not possible, but one month is playable.”
Some brokers would still have preferred that the Banque de France review its way of calculating these ceiling borrowing rates. “The usury rates will remain established on the basis of the average of the rates practiced during the three previous months”, specified the Bank of France this Friday. In the fall of 2022, however, there had been talk of the Banque de France basing itself on the loan rates achieved during the last month of the quarter. “The last three months, it weighs down the average, it should at least be established on the basis of the two months, or even the last month”, estimates Damien Raquidel. This broker is eagerly waiting to see “how evolves” the rate of attrition next February 1st. “It’s a big expectation,” he says. The wait for the figures given by the Banque de France will now be a little shorter.