What is the wear rate? How to calculate the mortgage threshold

What is the wear rate? How do you measure it? Who decides the maximum threshold on the mortgages of this index? We will answer these questions that probably many debtors have asked themselves, trying to figure out if their loan is too expensive. As is known, the operation of almost all loans (non-interest-bearing loans are excluded) provides that those who provide the loan are remunerated through the recognition of an interest rate, calculated on an annual basis as a percentage of the capital. So far so normal: however, it can happen that those who have a loan contract may find themselves burdened by excessive rates. These are precisely usurious rates , which constitute a criminally relevant practice.

The problem is to certify clearly if a high-interest rate is really an example of wear or not

high interest, rate, loan

In Italy, it is the Bank of Italy’s duty to establish the threshold above which an interest rate becomes a symptom of usury. However, this calculation does not require the Bank to simply identify a certain value of the rate and indicate it as illegal: behind this choice there is a count that considers the trend of the credit market in Italy and the evolution of interest rates. interests.

The measure taken into consideration by the Bank of Italy is the TEGM, average overall effective rate , not to be confused with the APR, annual percentage rate , which adds to the interest the accessory costs of managing the loan. The TEGM calculates the interest applied to transactions of the same credit category (for example, mortgages) considering bank commissions, but not other expense items, such as taxes and fees. This rate is recorded by the Bank of Italy every three months, on behalf of the Ministry of the Economy and Finance. The tables resulting from this inspection are then published in the Official Journal and on the websites of the Bank of Italy and the MEF.

The Bank of Italy identifies what is a usury rate on mortgages


Increasing by one quarter the TEGM recorded for a certain category of loans, adding then another four percentage points . At this point, if the difference between the TEGM recorded on the market and the final result is greater than eight percentage points, there is a wear rate. It will then always be the Bank of Italy to monitor the banks, so that they will follow its instructions in calculating the rates and not exceed this threshold. However, if you fear being subjected to a wear rate, you can file a complaint with the competent authorities.