Good news is on the horizon for aspiring homeowners in France. According to the latest forecast from Crédit Logement, one of the top organizations guaranteeing home loans in the country, real estate loan rates are expected to see only a modest increase, reaching an average of just 3.25% by the end of 2025. This prediction is a positive surprise, considering many market watchers expected steeper hikes.
A Reassuring Forecast Following Political Stability
Just days ago, many real estate loan brokers braced for a possible escalation of rates up to 3.5% by late 2025, especially amidst political uncertainty and as France awaited the outcome for the new Lecornu 2 government. However, with the government having survived recent censure motions in the National Assembly, political waters appear calmer for now—helping to contribute to a more stable outlook in the financial markets.
On October 16, Michel Mouillart, a respected economics professor and member of the Observatoire de Crédit Logement, shared his more optimistic projection: “We anticipate an average rate of 3.25% at worst in the fourth quarter of 2025, compared to 3.12% in mid-October.” His outlook is buoyed by the easing costs of French debt and a belief that the broader politico-economic environment won’t deteriorate further.
Falling Bond Yields Help Borrowers
The 10-year French Treasury Bond (OAT)—a key benchmark for setting mortgage rates—supports this optimism. The 10-year yield dipped to 3.34% this Thursday, down from 3.5% just a week earlier. These lower borrowing costs for the French state often translate into reduced pressure for banks to increase mortgage rates, making it good news for homebuyers.
A More Affordable Future for Young Homeowners
Mouillart’s calculations indicate that the average rate could settle at 3.14% for the entirety of 2025, a significant decrease of over half a percentage point compared to 2024. Moreover, he expects rates to stabilize (“a zone of flatness”) around 3.14% for 2026, allaying fears of dramatic future increases.
These steady rates are particularly positive for buyers under 35 years old, who have seen strong support from French banks in recent years. With accessible credit, more young adults can take their first steps on the property ladder.
Bottom Line: Stability Returns to France’s Real Estate Credit Market
With rates likely to stay moderate through 2025 and beyond, French families and first-time buyers can plan with greater confidence. The combination of political calm, easing debt costs, and friendly bank policies creates a more favorable environment for those seeking a home loan, offering hope after a period of uncertainty.
Key takeaways:
- Crédit Logement predicts 3.25% average mortgage rates by end of 2025.
- Average rates over 2025 projected at 3.14%, down 0.53 points from 2024.
- Market stabilization follows reduced French bond yields and increased political calm.
- Young buyers under 35 continue to benefit from bank support.
- Experts expect continued rate stability into 2026.
