Newly published Usury Rates (aka “Taux d’Usure” in French) are out of sync with increasing mortgage rates and closing costs.
This is not good news when purchasing a property in France with a 20 to 25 years mortgage duration.
Implemented to protect borrowers, the usury rate is a maximum annual percentage rate (APR) above which it is prohibited for an establishment to lend money. The “Banque de France” calculates the rate by collecting average effective rates charged by lenders increased by one third. Published quarterly, the usury rate also varies according to the type of loan (consumer credit, mortgages, revolving credit, etc.), amount borrowed and duration.
For the most common loans (Duration of 10 years and less than 20 years), the current usury rate is 2.43% (2.52% last year in April 2021) but it is lower for mortgages over the 20 years duration at 2.40%.
With mortgages rates (1.65% fixed over 15 years, 1.90% fixed over 20 years and 2.25% over 25 years) and mortgage life insurance premiums on the rise, the total APR on a long-term financing is often above the acceptable usury rate for many projects.
Our dedicated team of brokers can determine your mortgage capacity and review the efficiency of your financing to ensure you are receiving the right mortgage solution for your purchase in France.
Current mortgage rates for April 2022
|Fixed rate(1)||Term||Monthly repayment
for 10 000€ borrowed
|1.28%||10 years / 120 months||88.82€|
|1.44%||15 years / 180 months||61.80€|
|1.65%||20 years / 240 months||48.95€|
|2.25%||25 years / 300 months||43.61€|
(1) The indicated rates are given for information purposes and are based on the latest bank rates of one or more of our partners. The rates in the table above do not include the ancillary cost as notary fees, guarantees, insurance and intermediation.
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