Real Estate Loans: The Usury Rate Increases Starting January 2023

The usury rate refers to the maximum rate at which banks can finance their clients. It is the APR (annual percentage rate) that must not exceed this usury rate. As a reminder, the APR includes the nominal rate (the bank's interest rate) as well as various costs related to the loan, such as borrower insurance or administrative fees. Set quarterly by the Banque de France, the usury rate is calculated based on the average rates applied by banks over the previous three months, increased by one-third.

The issue is that the usury rate is adjusted quarterly, while interest rates have been rising steadily every month. As a result, many loan applications are excluded due to a "scissor effect." This issue has been temporarily resolved thanks to the increase in the usury rate applied from January 1, 2023.

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