Attrition rate: 4% since March 1, good or bad news?

WEAR RATE. Since March 1, 2023, the attrition rate has increased; from 3.79% to 4%. Enough to grant more credits, but not only.

[Updated; day on March 3, 2023. 4:25 p.m.] The rate has once again increased. Since March 1, 2023, it has reached 4% for a home loan. fixed rate higher than twenty years. As a reminder, the usury rate makes it possible to define the maximum legal rate at which banks and credit institutions are authorized to charge; practice when they give you a home loan. Good news for borrowers, this new measure should allow banks to grant more credit. In summary, the banks will be able to adjust their trade policy and release funds that are currently locked. But the other side of the coin lies elsewhere. If it will be easier to borrow, the cost of credit will be higher. Indeed, this operation could contribute to some rate hike. Currently, the average rate of a loan over twenty years has reached 2.9% against only 1% in February 2022. A trend that is not about to end soon. reverse.

What is wear-rate?

Above all, the wear rate makes it possible to protect a borrower against excessive rates that could be offered to him by various credit institutions. In other words, it makes it possible to avoid situations of serious over-indebtedness for an individual, and to on a larger scale, the destabilization of the global economy. It therefore plays the role of regulator. It applies to home loans as well as home loans. consumption, account overdrafts, or revolving credits.

What is the rate of wear in 2023?

How is the wear-rate calculated for a loan real estate?

It is the Banque de France which sets the wear rate. It is based on the average effective rates charged by credit institutions increased by a third. The thresholds vary according to the amount borrowed, the duration of the loan and the category of loan chosen (consumer credit or revolving credit for example).

Why is my home loan refused? due to the rate of wear?

In 2022, the evolution of the market will real estate is more than questionable and uncertain. Since the beginning of 2022, interest rates have been increasing faster than this famous attrition rate. De facto, many applicants for real estate loans have their loan applications refused. A study by Opinion System, commissioned by the French Association of Bancassurance Intermediaries (AFIB) even states that since January 2022, this increase of the wear rate is responsible for the refusal of 45% of applications for real estate loans from banks. This is why some professionals in the sector are asking for a change in the method of calculating the wear rate by increasing by two thirds, instead of one third.

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