Fixed at 3.57% on January 1, 2023 for loans with a term of 20 years and over, the rate of wear, henceforth revised monthly, will be fixed at 3.79% from February 1. Before a further increase in March.
A wear rate of 4% is coming soon? If it will probably still take a month or two to cross this threshold, one thing is certain: the new method of calculating the rate of wear will give air to borrowers. as of February 1, 2023, the rate of wear and tear will thus be fixed 3.79% for home loans with a term of 20 years and over3.71% for loans between 10 and 20 years, and 3.53% for loans with a duration of less than 10 years.
| Type of real estate loan | Maximum rate * |
|---|---|
| Fixed rate loan on… | |
| Less than 10 years old | 3.53% |
| From 10 to 20 years | 3.71% |
| 20 years or older | 3.79% |
| Other types of mortgage | |
| Floating rate | 3.63% |
| Bridging Loans | 3.93% |
* Maximum insurance rate and bank charges included.
As a reminder, the wear rate is the maximum all-inclusive rate (insurance and bank charges included) above which the bank cannot lend. Until now, the Banque de France based its calculation on the average of the credit rates (taking the APR, the all-inclusive rate of the credit) of the last 3 months and the increase of one third to fix the rate of wear of the following quarter. A method that no longer worked, while mortgage rates have been increasing for a year, much faster than the rate of wear.
A market that should become more fluid
After having turned a deaf ear for a long time, the Banque de France confirmed that at the end of the quarter certain files, pending the next significant quarterly increase in the rate of wear and tear, are thus postponed to the beginning of the following quarter, creating an imbalance in the distribution of credits. To avoid this problem, and in agreement with the Ministry of the Economy, it therefore decided to monthly pay this wear rate. From now on, and for a period running from February 1 to next July 1, the wear rate will therefore be reviewed every month. The rates of wear will remain established on the basis of the average of the rates practiced during the three previous months, specified the Bank of France.
A new method of calculation which brokers welcome: The rate of wear, revised each month, should better follow the increase in credit rates and stick to the reality of the rates practiced, deciphered for example Mal Bernier, spokesperson for Meilleurtaux . The new rate announced today is certainly good news, the real estate market should become more fluid fairly quickly especially as the demand is there!
Find the lowest rate for your real estate project!
In mid-January, the French Banking Federation (FBF) also welcomed the decision to temporarily monthly update the usury rate, while insisting on responding to exceptional circumstances: this will allow more borrowers to have access to the property without giving up the formula that moderates the rise in real estate rates.
Find the best rate for your real estate project