The ‘’Taux d’usure’’ is increasing and it is not that bad of a thing!
The Annual Percentage Rate of Charge (or ‘’APRC’’, also called ‘’T.A.E.G’’ in French which stands for ‘’Taux Annuel Effectif Global’’) is the rate you pay including the mortgage interest rate, the mortgage insurance cover, the bank fees, the mortgage tax and sometimes the broker fees.
The ‘’taux d’usure’’ is the maximum APRC that you can have for your mortgage in France.
It is calculated on the average of the rates from the previous quarter which the government then increases by one third.
The banks borrow some of the money on the financial market. When the cost of buying money increases, the banks increase their rates.
One issue (or one of the many issues?) we have met lately is the speed which the cost of borrowing for the banks has increased by since February. Therefore the banks had to react and increase their rates quickly to maintain some kind of profit.
And very often, the APRC has ended up above the ‘’taux d’usure’’ which leads to:
Either the bank refuses your application as it is illegal to have the ARPC above the ‘’taux d’usure’’
Or the bank decides to reduce the mortgage rate, making a calculated loss (up to a certain point before they call it a day)
An increase of the ‘’taux d’usure’’ may therefore increase your chances of being financed!