As of 1^er July and until 1^er September 2024, for fixed-rate loans of 20 years or more linked to a real estate purchase, the maximum rate that may be granted by banks shall be increased to 6.16%, compared to 6.39% in the second quarter of 2024. This is the first decline since 2021 in the wear and tear of this category of real estate loans, according to the Banque de France.

The wear-and-tear rate is the maximum legal interest rate that credit institutions are allowed to charge when granting you a loan. It is regulated by the Consumer Code, set up by the State with the aim of protecting borrowers, and set by the Central Bank on the basis of the rates applied by the banks in the previous 3 months.

There are different rates of wear and tear depending on the type of loan you receive, its amount and its duration.

More precisely, the wear rate is the annual percentage rate of charge (APR) the maximum that can be applied to you when taking out a loan.

The APR is the all-inclusive interest rate on a loan. It includes the nominal interest rate (the rate used to calculate the interest on your loan) and the elements that are a condition for obtaining the credit or for obtaining it on the terms advertised:

• application fees;
• fees paid or due to intermediaries involved in any way in granting the loan (e.g. broker);
• compulsory insurance and guarantee costs.

If, at the time the loan is granted to you, the APRC of the loan exceeds the rate of wear and tear, the loan is considered usurious. Loans at usurious interest rates are prohibited.