WEAR RATE. An increase in the wear rate was recorded from September 1, 2023. Here are the consequences.
The wear rate was once again raised by the Banque de France. From 1 September 2023, banks will now be able to offer a real estate loan over 20 years or more at a maximum rate of 5.56%. This ceiling has been increasing for several months and is also on the rise for all other types of credit that banks can grant. The main effect of this decision is to make the cost of loans 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 – the banks protect 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, even decreasing.
The rate of wear is the maximum legal rate at which a credit can be contracted. 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 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.
| 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 over 6,000 euros | 6.85% |
| Real estate loans and loans for work in excess of €75,000 (2) | |
| Fixed rate loans with a term of less than 10 years | 4.23% |
| Fixed rate loans with a term between 10 years and less than 20 years | 5.28% |
| Fixed rate loans with a term of 20 years and more | 5.56% |
| Variable rate loans | 5.13% |
| Bridging loans | 5.53% |
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).