Mortgage rates in France are set to tick higher in early 2026, with banks now facing new regulatory limits on what they can charge borrowers. The Banque de France has announced updated “usury rates”—the maximum allowable rate for home loans including all associated fees—for the first quarter of 2026. This move signals a real estate credit market that continues to settle well above 3%.
For fixed-rate mortgages of 10 to 20 years, banks won’t be able to charge more than 4.59% in the first quarter of 2026, down slightly from the previous period. For loans longer than 20 years, the ceiling climbs to 5.13%, up from 5.09% at the end of 2025.
Current market rates remain below these limits. In late 2025, the average mortgage rate stood at 3.85%. However, brokers and banking professionals say rates are likely to continue rising in 2026. “With strong competition among banks and ambitious lending targets, the increase in rates should remain moderate to start the year,” said Julie Bachet, CEO of mortgage broker VousFinancer. Yet, beyond the early months, she cautioned that a drop in rates is unlikely.
Despite subdued inflation and no immediate signs of rate cuts from the European Central Bank, the market has picked up: new home loans increased by 38% from January to September 2025. For many buyers, rates above 3% have become the new norm. A study from the BPCE Observatory notes that French households now view interest rates above 3% as acceptable, given current economic uncertainty.
The main question for 2026 will be whether households can continue to afford rising rates—or if the steady increases will eventually cool housing demand.
