Increase in the usury rate for property loans to individuals in Monaco


Individuals who want to buy a property often use bank loans, which is often justified by the fact that they do not have all the cash flow they need to buy the property. It can also be justified when buyers want to benefit from leverage while keeping their cash flow, which, if invested, can earn them more than the cost of financing.

Borrowing conditions follow the evolution of the key interest rates set by the central banks as well as the ratio between supply and demand.


There are two main types of property loans:

  • Mortgage loan: loan secured by a mortgage (security) on one or more properties owned by the borrower;
  • Lombard loan: loan secured by the pledge of a securities deposit: shares, bonds, financial investments, etc.


Each of these loans has many characteristics, particularly in terms of interest rates (fixed, variable or other), or the method of capital refund (bullet, amortising, bridging or other).

For the same property project, the proposals made by the various credit institutions can be very different due


The annual percentage rate of charge (APR)

Each loan offer must mention the APR, expressed as a percentage, which reflects the total cost of the credit, namely:

  • the basic interest rate (or nominal rate)
  • fees, commissions and other remunerations (e.g. registration fees or file fees)
  • the borrower's insurance premiums when compulsory insurance is taken out at the same time.

The borrower must then compare the different APRs to choose the best credit offer.

However, banks may not offer an APR higher than the usury rate, under penalty of sanctions detailed below.


The usury rate *

The interest rate that banking establishments are authorised to charge when granting a loan is capped and determined in the Principality of Monaco by Sovereign Order. This is known as the usury rate which is equivalent to the maximum legal interest rate, based on the average of the rates charged during the previous three months.

The setting of a usury rate protects the borrower from being offered excessive rates; too high interest rates could put the borrower in financial difficulties and, on a larger scale, destabilise the overall economy. The usury rate therefore plays a regulatory role.

*The usury rate should not be mistaken with the legal interest rate (set at 1% by Sovereign Order n°5.444 of August 6th, 2015) which applies in all matters and is used to calculate interest on sums to be paid in the event of late payment ordered by a court decision.


The revision of the usury rate

Recently, Sovereign Order n°9.866 of April 19th, 2023 (amending Sovereign Order no. 2.271 of July 6th, 2009 relating to the determining of the usury rate, as amended), published the latest usury rates as there is not one, but several usury rates depending on the type of loan and the borrowers.

Only the rate for property loans to individuals has been increased from 2.13% to 3.44%, with the other rates remaining unchanged. The rates are set as follows:

For individuals:

  • Overdrafts: 14.88  %
  • Personal loans: 3.32 %
  • Property loans: 3.44  %

For companies and individual entrepreneurs:

  • Overdrafts: 8.36%.


The revision of these average rates impleted under the same conditions by bona fide lenders is permitted several times during the same year in accordance with Article 1 of Sovereign Order no. 2.271 dated July 6th, 2009 relating to the determining of the usury rate, as amended by Sovereign Order no. 9.169 dated March 31st, 2022. Before this date, it was calculated annually.

This calculation is made according to a simple arithmetic average of the average effective rates observed in a sample of Monegasque credit institutions, increased by one third.


Penalties for usurious rate (Article 357 of the Monegasque Criminal Code).

An usurious rate is a rate that exceeds the APR by more than half at the time the loan is granted.

In the event that a loan is considered usurious, Article 357 punishes with the fine provided for in Article 26 (3) of the Criminal Code (from 9,000 to 18,000 euros) any lender who is found to have charged, in view of the particular circumstances of the case, an effective interest rate that exceeds by more than half the average rate charged under the same conditions by bona fide lenders for credit operations involving the same risks as the loan in question.

In the event of a repeat offence, the penalty shall be imprisonment for one to six months and the fine provided for in Article 26 (4) (from EUR 18,000 to EUR 90,000), or one of these two penalties only.


Excessive collections shall be deducted by operation of law from the normal interest due on the day of the proceedings and, in the alternative, from the principal of the claim.

If the debt is extinguished in capital and interest, the lender shall be ordered to return to the borrower the sums unduly collected, with interest from the day of their collection.


Despite the current unfavourable interest rate environment and the significant cost of calculating the interest linked to the loan, borrowing rates remain well below the general level of inflation observed (+8.3% in the Euro zone over the last 12 months according to data on March 2023).

Valeri Agency will help you to buy properties in Monaco and, if you need to finance your project, to put you in touch with credit institutions which will work out with you a tailor-made offer to optimise your assets.