France’s real estate mortgage rates are rising quickly in September 2025, with most offers above 3%. Learn why borrowing costs are increasing, how political tensions and bond yields impact homebuyers, and why waiting for lower rates may not pay off in France’s evolving real estate market.
France’s Real Estate Market Faces Sharp Rise in Mortgage Rates This September
France’s real estate market is gearing up for a turbulent autumn as borrowing rates surge across the board—a shift already apparent in September’s mortgage rate scales. The increase follows a heat wave in bond yields and political concerns after the Bayrou government’s recent vote of confidence, leading experts to warn that the era of falling rates is over.
Bond Yields and Political Uncertainty Fuel Rate Hike
September 2025’s rate jump is closely tied to escalating 10-year government bond yields (OAT), which soared above 3.5% following fears of another political stalemate in France and uncertainty around the 2026 budget. Banks are now factoring these elevated refinancing costs into their loan offers, pushing mortgage rates higher for all profiles.
How Much Have French Mortgage Rates Increased?
Mortgage broker Pretto reports that the average home loan rates rose by 20 basis points across maturities (15–25 years) for borrowers earning less than €40,000, and nearly as much for those earning up to €80,000. Even high-income borrowers are seeing increases of 15 basis points.
September 2025 average rates:
- 25 years:
- Best profiles: ~3.15%
- Modest incomes: ~3.45%
- 20 years:
- Most offers: 3.10% to 3.40% (rarely below 3%)
Fewer Discounts, Stiffer Requirements for Homebuyers
Banks are tightening their lending criteria and offering fewer discounts, especially to young and first-time buyers, as many have already met their annual mortgage production targets. This shift means that waiting in hopes of a rate drop may not be a wise strategy for potential buyers.
The End of Monetary Easing—and Hope for Lower Rates
With the European Central Bank signaling the end of its monetary easing cycle, the possibility of falling rates in the near future has all but vanished. On the contrary, further rate increases are expected as we approach the end of 2025.
What Should Buyers Do Now?
- Act Promptly: With upward pressure on rates and limited prospects for cuts, prospective buyers may wish to secure current offers without delay.
- Expect Higher Costs: Budget for higher monthly payments due to increased rates and tighter conditions.
- Monitor Political Developments: Political uncertainty may cause further volatility in bond and mortgage rates.
Key Takeaways for France’s Real Estate Market in 2025
- Mortgage rates are climbing fast, with most offers above 3% for 20- and 25-year loans.
- Escalating bond yields and political risk are the main drivers.
- Banks are less generous with discounts and more selective with approvals.
- Waiting for lower rates is a risky strategy—further hikes are likely before year-end.
Stay tuned for more updates on France’s real estate and mortgage trends as the market continues to adapt to rising rates and political uncertainty.
