Bank loans and loans

Increase in wear-out ceiling

Publié le 04 décembre 2023 - Legal and Administrative Information Directorate (Prime Minister)

Have you taken out a consumer credit or a mortgage? How much is this credit going to cost you in addition to the amount you borrowed? As of 1er December 2023, the ceiling for the wear rate is increasing. Banks can grant mortgage loans of up to 6.11% for fixed-rate loans of 20 years and over. Service-Public.fr reminds you of wear and tear and tells you about the ceiling increase.

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Image 1Crédits: Drazen - stock.adobe.com

The attrition rate is the maximum annual percentage rate of charge (APRC) at which a loan may be granted to an individual by a credit institution. It tells you the total cost of the loan and therefore the amount you will have to pay in addition to what you actually borrowed (the principal).

This rate is regulated by the Consumer Code and put in place by the State to protect borrowers. It depends on the type of loan, the amount and the duration of the loan.

A notice published in the Official Journal of 29 November 2023 indicates the new ceilings:

  • for 10-20 year mortgages: the average wear and tear in november 2023 was 4.35%; from 1er December 2023, it is increased to 5.8% ;
  • for fixed rate mortgages over a period of 20 years or more: the rate shall be increased to 6.11% as of 1er December 2023, compared to 5.91% for appropriations entered in November 2023.

This represents an increase of 2.5 points in one year.

Please note

the wear rate shall be published in Official Journal by the Banque de France at the end of each quarter for the following quarter; since February 2023, due to the inflation context, it is temporarily revised monthly.

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