APR and usury rate of a mortgage loan: how to read them

The annual percentage rate (APR) represents the "all-inclusive" cost of a loan (economie.gouv.fr). A loan is considered usurious when its APR exceeds the maximum legal interest rate, which is set quarterly by the Bank of France. It is illegal to grant a loan at a usurious rate. Therefore, it is not the nominal interest rate that is compared to the maximum rate, but the APR.

This page explains what the APR (Annual Percentage Rate) includes and how the usury rate works. It does not provide any specific figures: these change quarterly and can be found on official websites. It does not provide a history of past rates. Nor does it describe the legal consequences of usurious lending, which the official websites consulted do not detail.

What the APR includes

According to economie.gouv.fr (page written on 11/07/2024), the APR (Annual Percentage Rate) applies to both mortgage loans and consumer credit. It includes:

The economie.gouv.fr website does not mention notary fees. It excludes property transfer registration fees. To find out what a specific APR includes, read the loan offer.

Where is the APR shown?

Economie.gouv.fr states that the APR (Annual Percentage Rate) must be displayed in advertisements and preliminary credit offers, and indicated on loan contracts. According to service-public.gouv.fr (verified on 05/04/2024), the loan offer must specify the amount, the interest rate, the APR, and the required guarantees.

According to service-public.gouv.fr, the APR (Annual Percentage Rate) allows you to compare several loan offers based on their total cost, provided the amount borrowed is the same. The website advises comparing the APR of each offer, and not just the interest rate.

The usury rate: the legal limit

Definition. Economie.gouv.fr (page written on 07/10/2026) defines it as follows: the maximum legal rate that credit institutions are allowed to charge.

Who sets it, and when. The Bank of France sets it quarterly. It is calculated based on the average effective rates of the previous quarter, increased by one-third (economie.gouv.fr, Bank of France). The new thresholds set by a notice dated September 25, 2026, have been in effect since October 1, 2026 (service-public.gouv.fr, published September 30, 2026).

Several rates. There are several limits depending on the type of loan, its amount and its duration. For mortgage loans, fixed-rate loans, variable-rate loans and bridging loans each have their own limit (service-public.gouv.fr).

Who is affected?. The limit applies to loans granted to individuals, associations, and local authorities. For businesses and self-employed individuals acting in a professional capacity, only overdrafts are subject to a limit (service-public.gouv.fr, Banque de France).

Between private individuals. Economie.gouv.fr states that no usury rate is planned for loans between individuals.

Sanction. Usury is an offense punishable by two years imprisonment and/or a fine of 300,000 euros, according to economie.gouv.fr, which cites article L341-50 of the Consumer Code.

APR and usury rate: numerical example (fictitious profile)

The figures below are illustrative hypotheses. They bear no relation to market conditions, actual usury thresholds, or offers from our banking partners.

Situation. Nadia and Karim are borrowing €280,000 over 20 years. Assumptions in this scenario: nominal interest rate of 3.00%, application fees of €1,500, required guarantee cost of €3,200, and required insurance of 0.30% per annum of the initial capital, or €70 per month. We assume constant monthly payments over 240 months, application fees and guarantee paid upon loan disbursement, and insurance included in the monthly payments. For illustrative purposes, we assume the maximum applicable rate for this type of loan at the time of the offer is 3.50% (fictitious value).

Issue. The nominal rate of 3.00 % is below this hypothetical ceiling. Does their loan pass the usury test?

Strategy. Compare to the maximum the APR, which includes the required processing fees, guarantee and insurance, and not the nominal rate.

Result.

Under these assumptions, the APR of 3.75% exceeds the hypothetical ceiling of 3.50%, while the nominal rate remains below it. This loan would be considered usurious. Therefore, the fees and costs charged by the lender are factored into the test. The APR in this example is calculated as the annual rate equivalent to the loan's cash flows: this is not the detailed regulatory method, which the consulted pages do not provide. This profile is hypothetical and does not represent a real-world offer.

APR and usury rate: what changes depending on your case

• The type of loan, fixed rate, variable rate or bridging loan, which determines the applicable ceiling.
• The amount and the duration, that the ceilings take into account.
• Fees and costs required by the lender: insurance, guarantee, processing fees, intermediary, property valuation.
• The date of the offer, because the limits are set every quarter.
• The quality of the lender Between private individuals, no usury rate is stipulated.

The rule depends on your situation. No results are guaranteed.