As 2025 comes to a close, the French real estate loan market is showing notable signs of stability. In December, most banks kept their mortgage rates nearly unchanged, sustaining a period of calm in borrowing costs that has lasted for several weeks. Industry observers say this stability could pave the way for a more dynamic mortgage market in 2025 and, especially, in 2026.
Current Rates: Little Change, Competitive Approach
Recent data confirms the trend towards steadiness. According to Pretto, average real estate loan rates in December stood at 3.15% for 15-year mortgages, 3.25% for 20 years, and 3.35% for 25 years. Variations between banks are marginal, with minor differences attributed to each applicant’s profile and the lender’s policies.
Despite slim refinancing margins—current rates are very close to, or sometimes slightly below, the 10-year French government bond (OAT) at 3.44%—banks remain actively interested in mortgages for customer acquisition. Some players, such as CCF, have already started deploying more strategic and aggressive offers to attract new borrowers.
Eye on 2026: Ambitious Strategies Brewing
Looking to the near future, banks have set ambitious targets for loan production in 2026. There’s a palpable desire among lenders to recapture lost market share and intensify the competition. Several banks are openly preparing for what could be a more offensive lending market, aiming to meet new household needs as the economic environment stabilizes.
Economic and Market Context: Uncertainty and Stability
On the economic front, the absence of a 2026 budget adds some fiscal uncertainty. Meanwhile, the European Central Bank (ECB) continues to hold its key rates steady, supported by inflation figures that are now close to the ECB’s 2% target. This pause in rate hikes is giving both banks and borrowers a clearer framework for planning ahead.
Despite some turbulence earlier in the year, the bond market has calmed, with the 10-year OAT remaining steady. This contrasts sharply with the market swings that characterized the first half of the year.
Borrowers Benefit: Purchasing is Profitable Again
While 2025 saw interest rates rise modestly from springtime levels, overall borrowing conditions are now more favorable than they were in 2023 and at the start of 2024. Research from MeilleursAgents shows the average payback period for a real estate purchase has dropped to 6 years and 9 months, from 11 years and 8 months the year before. For well-prepared households, this shift means that home buying is regaining its allure as a profitable, mid-term investment.
Outlook for 2025: From Volatility to Stability
This year has taken borrowers and banks through several phases: a bumpy, uncertain first half driven by economic volatility, a cautious middle period with banks scrutinizing loan applications more closely, and finally, this stable year-end period as the market resets.
After two challenging years, France’s real estate loan market now seems poised for renewed optimism. With steady rates, improving conditions for borrowers, and ambitious strategies in the pipeline for 2026, the outlook for home buyers and lenders appears to be brightening as we move into the new year.
