Maximum legal rate in another galaxy...

Discussion in 'The Fair Mortgage Rates Campaign' started by Cilar, 28 Dec 2018.

  1. Cilar

    Cilar Registered User

    Posts:
    19
    In France... there are maximum legal rates set by the consumer watchdog.

    They are reviewed every quarter. These maximum legal rates include other costs such as mortgage protection insurance. From the 1st of Jan 2019, 3.01% is the maximum rate that a bank can legally charge for a 20 fixed term mortgage. 2.79% for a 10 year fixed rate. 2.43% for a variable rate. 3.24% for a bridging loan (they never dissappeared in France).

    These maximum rates are calculated based on the average of the market over the past quarter + 33%

    https://www.cbanque.com/credit/actu...uperieurs-a-3-interdits-debut-2019?format=amp
     
  2. newirishman

    newirishman Frequent Poster

    Posts:
    749
    Not a bad rule to use the last quarter as a baseline. Might limit drastic increases in rates.
    Can’t say if this really helps with consumer protection, especially if you fix for long duration.

    A few other points on French mortgages though:
    - 75%-80% max LTV seems to be standard
    - 10-15% of property price in transaction fees not unusual
    - total mortgage term payments not more than 30% of household disposable income
    - you must wait 10 days before accepting a mortgage offer (enough time to read the small print, imagine that!)
    - some cities provide interest-free credit to help with the down payment if you don’t have enough savings
     
  3. NoRegretsCoyote

    NoRegretsCoyote Registered User

    Posts:
    71
    Ireland adopted the euro 20 years ago but has still never adopted European standards of underwriting and credit discipline.