In financial matters, many safeguards aim to protect consumers against themselves.

Because it is not uncommon to overestimate your borrowing capacity, ignoring any unforeseen events and changes in circumstances that may occur when repaying a loan over several years.

A fortiori in the real estate field where we generally commit to two decades.

The legislator is therefore responsible for containing the degree of indebtedness of individuals to a level deemed reasonable through a strict framework of loan conditions.

In addition to the maximum borrowing period and the debt ratio – set at 25 years and 35% since January 1, 2022 – the wear rates are part of these protections.

A healthy maximum

As its name suggests, this index corresponds to a legal boundary beyond which the transaction is illegal.

In other words, it is the maximum rate – understood as the annual percentage rate of charge (APR) encompassing all costs, including insurance – at which a credit can be granted.

If the primary objective is to avoid over-indebtedness of households due to excessive interest to be repaid, it is also a question of promoting the stability of the economy.

In order to best adapt to market realities, wear rates are updated quarterly by the Banque de France and published in

the Official Journal

.

To do this, the institution establishes an average based on data on loans granted by financial institutions over the previous three months.

This average effective rate is then increased by a third to form the wear rate for the category concerned.

Real estate loans but also cash loans and other professional loans are subject to this legislation.

All of the rates are also available online on the Banque-france.fr portal, in the Statistics section.

Limits

This evolving barrier system is based on a balance aimed at protecting consumers, without drastically reducing their possibilities of accessing borrowing.

However, although the calculation of usury rates is updated every three months, sudden rises in the market quickly seize up the mechanics by bringing the rates actually practiced by the banks too close to the maximum ceiling not to be exceeded.

When the limit is reached, institutions then have no choice but to refuse to grant credit.

And depending on the profiles of borrowers, this risk is not negligible, as explained by Vousfinancer in early April.

“Usage rates no longer correspond at all to the reality of the market, because of their method of calculation which generates a lag and inertia: as proof, over twenty years and more, the most widespread credit durations, the usury rate fell by 20 points in one year, dropping from 2.60% to 2.40%, even as credit rates increased by 20 points.

In April 2021, we borrowed on average at 1.25% compared to 1.45% currently, with a historically low wear rate”, analyzes Julie Bachet, general manager of the brokerage network.

Result: “75% of our branches have encountered loan refusals linked to wear and tear rates or the debt ratio in recent weeks.

»

Tips

In the absence of a miracle solution, certain tricks make it possible to lower the annual percentage rate (APR) so that it does not reach the rate of wear.

With a good contribution and sufficient income, one can indeed negotiate the bank administration fees, but also obtain a discount on the borrowing rate.

That said, it is on the borrower insurance side that the savings are the most notable.

Opting for a delegation of insurance allows you to significantly lower the APR and in passing the total cost of the loan.

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