the maximum rate for a 20-year loan will exceed 3% on October 1

The maximum legal mortgage rate, also known as the usury rate, will increase on October 1 from 2.57% to 3.05% for a loan of 20 years or more, the Banque de France announced on Wednesday September 28. 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 application of the formula provided for by law” leads to “a well-proportioned and more marked increase than last June”said the Banque de France in a press release.

The rate is calculated each quarter by the Banque de France, which takes into account the average rates charged by banks over the past three months, increased by one third. There are as many wear rates as there are types of credits.

These ceiling rates are under fire from critics, in particular from brokers who see them as a barrier to access to real estate credit. 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.

The Banque de France judges “neither desirable nor necessary (…) an exceptional increase” wear rates, the role of which “is to protect borrowers”, she said Wednesday. This rise is “highly anticipated” by the profession, explained earlier in the day the president of the network of Cafpi brokers, Olivier Lendrevie, for whom “a wear rate of 3% would resolve the vast majority of blocking situations observed in recent weeks”.

The increase will also result in 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.