Mortgage rates in France are set to climb to 3.55% by Q4 2026 and near 4% in 2027, while loan terms lengthen to 21 years — squeezing buyers without deposits.
Mortgage rates in France are expected to rise gradually over the next two years, pushing borrowing costs higher for many homebuyers and lengthening loan terms, according to fresh estimates from the Observatoire Crédit Logement/CSA.
The observatory measured an average mortgage rate of 3.14% in December 2025 (excluding insurance and related costs). It now forecasts a rise to 3.55% in the fourth quarter of 2026 (annual average 3.41%) and to 3.95% in the fourth quarter of 2027 (annual average 3.60%). The upward path follows rate troughs around 3.06% reached in June and August 2025.
Banks are adjusting pricing as market borrowing costs climb and economic uncertainty persists. French lenders rely in part on wholesale markets to fund mortgages; with the cost of French debt near 15-year highs at the end of 2025, banks are protecting margins by raising rates for new borrowers. Initially cautious about rate hikes to preserve lending volumes, many institutions have shifted to firmer increases amid a dip in loan production late in 2025.
Longer loans, same pressure
To partly offset higher rates, average mortgage durations are lengthening: the typical loan term now approaches 21 years (around 250 months), the longest on record for the observatory and edging closer to the 25-year limit set by the Banque de France and the Ministry of the Economy. At the same time, the average monthly annuity for a €100,000 loan has remained relatively stable since early 2025 — 11.1% lower than in December 2023 but 18.5% higher than December 2021 — underscoring how timelines are being stretched to ease monthly burdens.
Impact on buyers
The market is seeing a cautious return of first-time buyers, helped in part by targeted offers such as subsidised or boosted rates on portions of loans (around 1.99% on part of the financing) and access to additional zero-interest loans (PTZ). Nevertheless, households without a significant deposit continue to struggle to access credit. Industry group FNAIM warned that financing remains largely reserved for wealthier households, with rising prices and costs further narrowing access.
What to expect
Mortgage costs are likely to incrementally rise rather than spike, but by the end of 2027 they could be approaching 4% for new borrowers if current trajectories hold. Prospective buyers should monitor available support schemes, compare offers across lenders, and consider how longer terms affect total cost and future financial flexibility.
