Usury rate in property lending: complete guide 2026

The usury rate is the maximum legal rate at which a bank can grant a mortgage in France. Set by the Banque de France and published quarterly, it incorporates the nominal rate, borrower insurance and all ancillary costs in the form of a TAEG. In 2026, after the credit access crisis of 2023, the mechanism has normalised but remains a determining parameter for any property purchase project in Paris.

Introduction

Between 2022 and 2023, the usury rate caused an unprecedented wave of loan refusals. The rapid rise in ECB key rates, combined with a quarterly calculation mechanism that was too slow, created a scissor effect that blocked thousands of perfectly solvent borrowers. In 2026, the situation is different: the monthly revision of 2023 smoothed the market, before a return to the quarterly rhythm in January 2024. However, the usury rate continues to influence the borrowing capacity of our clients, particularly those buying in Paris with budgets of 500,000 euros to 2 million euros and above.

Table of contents

• What is the usury rate and what is it for?
• How does the Banque de France calculate the usury rate?
• How has the usury rate moved since 2023?
• Why does the usury rate block a mortgage application?
• How can you lower your TAEG to stay below the ceiling?
• What impact does the usury rate have on the Paris market in 2026?

What is the usury rate and what is it for?

The usury rate is the maximum legal TAEG beyond which no French bank may lend: approximately 5.27% in the third quarter of 2026 for a fixed-rate loan of 20 years or more. Its purpose is to protect borrowers against excessive loan conditions, not to indicate a market rate.

It is a legal ceiling established by the French Consumer Code (articles L314-6 and following). No bank in France can offer a mortgage whose TAEG (Taux Annuel Effectif Global) exceeds the usury rate in effect on the date the loan offer is issued.

The TAEG aggregates all credit costs: the nominal interest rate, borrower insurance, processing fees, guarantee costs (mortgage or surety bond), and any brokerage fees. It is this overall rate, not just the nominal rate, that is compared against the usury threshold. Our guide on the annual percentage rate details the full calculation.

The usury rate does not constitute a “normal” or “recommended” rate. It is a legal maximum. In practice, a borrower who obtains a loan near the usury rate is paying dearly. The goal is to sit as far below this ceiling as possible.

How does the Banque de France calculate the usury rate?

By increasing by one third the average effective rates applied by credit institutions during the previous period. The threshold is revised quarterly. Between February and December 2023 it was revised monthly, long enough to remove the lag that was blocking applications.

The formula, seemingly simple, involves a structural time lag between the market and its ceiling.

The calculation is performed by loan category. For property loans, three brackets exist: fixed-rate loans under 10 years, those from 10 to under 20 years, and those of 20 years or more. Variable-rate loans have a separate threshold.

From February to December 2023, the Banque de France revised the usury rate monthly instead of quarterly. That exceptional measure did its job, then ended: the quarterly rhythm returned in January 2024. In 2026 the usury rate is therefore published quarterly, and the ceiling tracks market rates with the lag that rhythm implies.

The Banque de France publishes these thresholds in the Official Journal and on its website. They take effect on the first day of the month following their publication.

How has the usury rate moved since 2023?

The usury rate on loans of 20 years or more went from 3.57% in January 2023 to approximately 5.27% in the third quarter of 2026, after a peak of 5.80 to 6.10% in 2024. What unblocked the market was not the level of the ceiling but its temporary switch to monthly revision in February 2023.

The detail of that trajectory illustrates the cycles the credit market has traversed.

2023: the scissor effect crisis. In January 2023, the usury rate for 20-year loans stood at 3.57%, while nominal rates had already crossed 2.50%. The gap between the ceiling and the real cost of credit (insurance, fees included) was becoming insufficient. Result: approximately 45% of mortgage applications were refused for exceeding the usury rate, according to brokers. The Banque de France responded by switching to monthly revision from February 2023. The usury rate gradually caught up with the market, reaching 5.56% by October 2023.

2024: stabilisation. ECB key rates peaked then began to decline. The usury rate stabilised around 5.80 to 6.10% for long-term loans, with the gap once again sufficient to absorb insurance and fees. The refusal rate dropped below 15%.

2025: a gradual decline. With the rate cuts initiated by the ECB, nominal mortgage rates came back down to 3.00-3.40% on 20-year terms. The usury rate followed, settling around 5.40-5.60% by year-end.

2026: a fragile normalisation. In the third quarter of 2026, the usury rate for 20-year loans sits at approximately 5.27%. Nominal rates fluctuate between 2.90 and 3.30% depending on profiles. The gap is comfortable for the majority of borrowers, but certain profiles remain constrained: older borrowers, those with health conditions that increase insurance costs, or buyers with a low deposit.

Why does the usury rate block a mortgage application?

Because the ceiling is compared against the full TAEG, insurance and fees included, never against the nominal rate alone. On a 500,000 euro mortgage over 20 years in 2026, the nominal rate sits around 3.10% but the TAEG reaches 3.47% to 4.10% once borrower insurance (0.30 to 0.80% depending on age and health), guarantee costs (0.05 to 0.15%) and processing fees (0.02 to 0.05%) are included.

A block therefore occurs when that sum reaches or exceeds the ceiling. Understanding the TAEG breakdown is essential for identifying levers for action.

Usury rate breaches occur primarily in three scenarios. When the borrower takes out expensive bank group insurance, particularly after age 45. When a medical profile triggers an insurance surcharge. Or when the bank applies an already elevated nominal rate due to an insufficient deposit.

For a purchase in the 14th arrondissement at 750,000 euros, a 50-year-old borrower with group insurance at 0.65% ends up with a TAEG close to 4.00%. The current ceiling of 5.27% leaves a margin, but it narrows significantly if the nominal rate is increased due to a deposit below 20%.

Three profiles therefore keep only a narrow margin in 2026: borrowers over 55, whose insurance weighs heaviest in the TAEG, applications whose debt-to-income ratio brushes the 35% ceiling, and 25-year loans, which combine a higher nominal rate with insurance paid over a longer period.

How can you lower your TAEG to stay below the ceiling?

The main lever is delegating borrower insurance: 0.15 to 0.30 TAEG points saved, free of charge and at any time under the Lemoine law. Next come a deposit taken above 20%, choosing a surety bond over a mortgage, adjusting the loan term, and putting banks in competition, which moves the nominal rate by 0.30 to 0.50 points for the same profile.

Lever	Effect on the TAEG	Condition
Delegating borrower insurance	0.15 to 0.30 points saved	Any time, free of charge, under the Lemoine law
Putting banks in competition	0.30 to 0.50 points saved	For an identical borrower profile
Deposit taken above 20%	Lower nominal rate	Available savings
Surety bond rather than mortgage	0.02 to 0.05 points saved	Approval from the guarantee body
Term brought below 20 years	Moves to another ceiling bracket	Affordable monthly payment

Our experience across more than 1,200 buyers supported since 2011 has allowed us to identify the most effective levers for staying below the usury rate.

Delegate borrower insurance. This is the primary lever. The Lemoine law allows you to change borrower insurance at any time, free of charge. By opting for individual insurance rather than a group contract, the TAEG saving can reach 0.15 to 0.30 points. For a 40-year-old borrower taking out a 600,000 euro loan, this represents savings of 15,000 to 30,000 euros over the loan term. Our guide on mortgage insurance details the various options.

Increase the personal deposit. A deposit exceeding 20% of the purchase price allows you to obtain a lower nominal rate and mechanically reduces the TAEG. In Paris, where the amounts involved are high, each rate point represents thousands of euros. Drawing on an old housing savings plan, a Paris housing loan or family assistance can tip the balance on an application.

Choose a surety bond over a mortgage. The cost of a surety bond guarantee (Credit Logement, CAMCA) is generally lower than a mortgage, and includes a refundable portion. The TAEG impact is modest (0.02 to 0.05 points) but can prove decisive in borderline cases.

Adjust the loan duration. Moving from 20 to 25 years increases the nominal rate but reduces monthly payments and can improve the debt-to-income ratio. Conversely, shortening to 15 years sometimes provides access to a more favourable usury rate (the 10-20 year bracket).

Approach multiple institutions. Nominal rate differences between banks reach 0.30 to 0.50 points for the same borrower profile. Using a broker or putting banks in direct competition remains the simplest way to reduce the TAEG.

What impact does the usury rate have on the Paris market in 2026?

In 2026 it no longer blocks applications, it sets the budget: a TAEG of 3.50% instead of 4.00% changes borrowing capacity by approximately 25,000 euros on a 700,000 euro loan over 20 years, meaning one arrondissement more or less. In 2023, by contrast, the credit squeeze triggered a 22% drop in existing property sales within Paris.

Normalisation has enabled a rebound, but the market remains structurally dependent on this mechanism.

For buyers in the 500,000 to 1 million euro range, who represent a significant share of our clientele at Home Select, the usury rate is no longer a direct obstacle in 2026. However, it does determine the maximum borrowing amount and therefore the accessible surface area or location.

The usury rate remains a leading indicator of market conditions. Its downward trajectory in 2025-2026 accompanied the recovery in transactions and the stabilisation of prices in Paris. Our property hunters monitor its monthly evolution to advise our clients as effectively as possible on the timing of their acquisition.

For investors using a mortgage with leverage, the differential between net rental yield and the total cost of credit (capped by the usury rate) determines the profitability of the operation. In 2026, this spread has turned positive again in several Parisian arrondissements and Ile-de-France municipalities, which is reviving interest in buy-to-let investment.

FAQ

What is the usury rate in 2026 for a 20-year mortgage?

In the third quarter of 2026, the usury rate for fixed-rate mortgages of 20 years or more stands at approximately 5.27%. This threshold is published quarterly by the Banque de France, after a monthly interlude between February and December 2023 intended to unblock the market.

How can I tell if my TAEG exceeds the usury rate?

The TAEG is mandatory on the loan offer provided by your bank. It includes the nominal rate, borrower insurance, guarantee costs and processing fees. If this TAEG exceeds the usury rate applicable to your loan category, the bank cannot legally grant the financing.

How can I work around a refusal linked to the usury rate?

Several levers exist: renegotiating borrower insurance through external delegation (average saving of 0.10 to 0.30 TAEG points), extending the loan term, increasing the personal deposit, or reducing guarantee costs by opting for a surety bond rather than a mortgage.

Is the usury rate the same for all borrowers?

No. The Banque de France publishes different usury rates by loan duration (under 10 years, 10 to 20 years, 20 years and more) and by rate type (fixed or variable). A 15-year loan is not subject to the same ceiling as a 25-year loan.

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Is your Paris purchase project blocked by a financing issue? Our property hunters work with a network of partner brokers and banks to optimise every application. Contact Home Select for tailored support.