France’s real estate borrowing rates have dropped below 3.5% again, as government bonds stabilize despite recent political events and Fitch’s downgrade. Average mortgage rates now range from 3.05% to 3.45%, with some borrowers negotiating even lower rates. Discover what’s next for France’s real estate loans in the face of ongoing political and economic shifts.
Bond Rates Retreat After Initial Spike
Earlier in September, the 10-year OAT (Obligation Assimilable du Trésor) rate exceeded 3.6% amid political uncertainty. However, financial markets quickly adjusted, with bond yields falling back below 3.5% less than two weeks later. The anticipated downgrading of France’s credit by Fitch on September 12 had a minimal effect, as markets had priced in the risk.
Stable Mortgage Rates for Buyers Across All Terms
In this climate, French banks initially moved to raise real estate loan rates in late August and early September. One large institution cited political instability and financial market tension as justification for a 0.10% increase. To date, rising rates have been limited to about a dozen banks.
Currently, the national average mortgage rates stand at:
- 15 years: 3.05%
- 20 years: 3.25%
- 25 years: 3.45%
Some exceptional borrowers are securing even better deals—down to 2.8% (15 years) and 3% (20 and 25 years).
Will French Mortgage Rates Change in 2025?
Future changes to #France’s real estate loan rates will depend on how quickly a new government is formed and its ability to gain the market’s confidence and pass a budget. Prolonged political instability could push government bond rates higher, possibly affecting mortgage terms.
At present, major brokerages like Vousfinancement expect rate stability, though some banks may issue isolated increases, especially if they have hit this year’s lending targets. For most borrowers, current rate variations have only minor impacts. For instance, a 0.10-point increase on a €200,000 loan over 20 years adds roughly €10 to the monthly repayment.
Outlook: Banks Prepare for 2026, Competitive Rates Expected
As French banks begin planning for 2026 mortgages, new loan requests from November onward will count towards the next year’s targets. After a robust year for home financing in 2025, banks are expected to keep rates attractive to maintain loan production.
Although deep rate discounts are now limited, many borrowers can still access advantageous mortgage terms as France’s real estate market navigates these turbulent times.
Stay updated on the latest trends in France’s real estate loans, mortgage rates, and market analysis.
