The new, more expensive mortgages for individuals

From 1^er January, the maximum legal mortgage rate will increase for loans over twenty years and more as well as over ten years and less.

SourceAFP

MBad news for individuals wishing to buy real estate. The maximum legal mortgage rate, also known as the usury rate, will increase on 1^er January to go from 3.05% to 3.57% for a loan of 20 years and more, according to the notice published Wednesday in the Official Journal. Intended to protect individuals from abusive borrowing conditions, this rate caps all the costs of a home loan: credit rate charged by the bank, any brokers’ commission, borrower insurance.

The rate is calculated each quarter by the Banque de France, which takes into account the average rates charged by banks over the last three months, increased by one third. There are as many wear rates as there are types of credits. Thus, for a loan of less than 10 years, the maximum legal rate of a mortgage will increase in January to 3.41% (against 3.03% currently) and that for a loan between 10 and 20 years will increase to 3.53 % (against 3.03%).READ ALSOMoney – No longer possible to have credit…These ceiling rates came under fire from critics this summer, particularly from brokers who saw them as a barrier to access to mortgages. One of their unions had even gone so far as to demonstrate on September 20 in front of the headquarters of the Banque de France in Paris, to ask the central bank to make a gesture.

“Protect Borrowers”

When last raised to 1^er October, the Banque de France had considered “neither desirable nor necessary […] an exceptional increase” in ceiling rates, whose role “is to protect borrowers”. Because raising the wear rate has the effect of making new mortgages more expensive for individuals. The rise in interest rates for new mortgages has been noticeable since the spring, with the banks passing on the tightening of the monetary policy of the European Central Bank (ECB), via an increase in its key rate, in order to combat inflation.READ ALSOUnderstand everything about your mortgageThe average interest rate on mortgages in France (all durations combined) stood at 2.25% in November, a highest for at least seven years, according to the dashboard of the Crédit Logement/CSA observatory. . In November 2021, the average interest rate was 1.06%.