Real estate loan over 25 years: the maximum APR set at 2.6% in April
The wear rate is none other than the legal limit that must not exceed the annual percentage rate of charge (APR). It is set by the Banque de France at the start of each quarter, and is published in the Official Journal. To determine this, the Banque de France takes into account the average effective rates applied by credit institutions during the previous period, increased by one third. The thresholds valid from April 1 therefore depend on the average rates applied by the banks over the period from January to March 2021.
The usury threshold applicable from April 1, 2021 is for example set at 2.52% for fixed rate loans with a term of between 10 years and less than 20 years (compared to 2.56% in January). For loans of less than 10 years, it is 2.52% (compared to 2.56%) and 2.6% (compared to 2.67%) for loans of 20 years and over.
In the second quarter of 2021, new 15-year mortgage loans with an APR greater than 2.52% are prohibited, as well as 25-year loans at an overall rate greater than 2.6%.
Note that the rate of wear is based on the TAEG and not on the nominal rate, which serves as a commercial argument for banks and as a benchmark for borrowers. The APR includes not only the interest on the credit, but also the costs of the application, insurance or even guarantee.
Usury rate: access to credit even more difficult in the 3rd quarter?
The objective of wear rates is to limit abusive practices and therefore to protect borrowers from over-indebtedness that would jeopardize their finances. But in return, the most fragile borrowers are sometimes excluded from credit because of this ceiling rate. These include the elderly, borrowers with a pathology, as well as the poorest households.
If for the time being, the difference between the rates charged and the usury threshold remains adequate thanks to the low rates, some financial institutions do not hesitate to revise their rates upwards, which could reduce the room for maneuver. future borrowers. Difficulties reinforced by the health crisis, many banks being more suspicious of certain profiles or certain sectors of activity.