The usury rate (aka Taux d’Usure in French) protects the purchaser by capping all the costs of all types of mortgages over multiple durations. Normally adjusted every quarter since its creation in 1966, the usury rates have been adjusted every month since the beginning of 2023 to avoid a complete freeze of the real estate market.
With its initial calculation determined in advance, this quarterly period seems insufficient to adapt to the market as the usury rates takes into account the average rates charged by banks over the last three months.
The Ministry of Economy and the Banque de France decided to apply the French lenders rates increases every month to calculate the usury rates so that it is closer to the market reality experienced by borrowers.
On January 1st 2023, the usury rate was set at 3.57% (for a loan of 20 years or more) followed by an increase of +0.22% in Feb, +0.21% in March, +0.24% in April and +0.28% in May to land at 4.52%.
The usury rate for June 2023 is published at 4.68% (on home loans of 20 years and over) with a more contained increase this time: +0.16% since last month.
This new increase is much less than the previous ones and against all expectations, it is good news. It shows that the rise in mortgage rates is slowing down and may be flattening out over summer just in time for the end of the monthly update temporary measure. The last monthly usury rates update is scheduled for July 1st returning to a quarterly update afterward.
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