Business · Economy · 4 hrs ago
French mortgage rates could top 4% by the end of the year
A 28-year-old self-employed buyer in Paris is looking for her first home after several years of renting.
French mortgage rates average about 3.7% for loans over 20 years, while the country borrows at around 5%.
Higher government borrowing costs can push up mortgage rates, because they affect how much banks pay to borrow money.
The buyer had a budget of €220,000 when her mortgage rate was 3.3%, but a broker says the increase has cut her borrowing capacity by about €17,000.
She may now look outside Paris to find a property within her budget.
Mortgage rates could pass 4% by year-end, according to the broker.
If rates keep rising and house prices do not fall, professionals say one in five current loan applications could be rejected.
French mortgage rates could exceed 4% by the end of the year, according to a mortgage broker cited by franceinfo.
French banks currently lend at an average rate of 3.7% over 20 years, while France borrows at about 5%.
A 28-year-old self-employed woman looking to buy her first home in Paris has seen her borrowing capacity fall as rates rose.
Industry professionals say that if rates keep rising and property prices do not fall, 20% of current mortgage applications could be rejected.
- Who
- French homebuyers, including a 28-year-old self-employed woman seeking her first apartment in Paris.
- What
- Mortgage rates could exceed 4% by year-end, reducing buyers’ borrowing capacity.
- When
- The report was published on 27 October 2026; the increase above 4% is forecast by the end of the year.
- Where
- France, with the buyer’s search focused on Paris and its outskirts.
- Why
- Mortgage rates are linked to the rates at which France and banks borrow.
This story does not have two clearly opposing sides.
With a rate of 3.3% and a 50,000-euro deposit, Lévana Berdah’s total budget was 220,000 euros.
The report said banks were lending at an average of 3.7% over 20 years and France was borrowing at about 5%.
Mortgage broker Mickael Moyal said mortgage rates could exceed 4%.
- France’s borrowing rate
- About 5%
- Banks’ average mortgage rate
- 3.7% over 20 years
- Lévana Berdah’s deposit
- 50,000 euros
- Her earlier total budget
- 220,000 euros at a 3.3% rate
- Potentially rejected applications
- 20% if rates keep rising and property prices do not fall
What people are saying
We have already seen higher rates in 2022-2023, when rates were at 4.5%. But such a rapid increase is the first time I have seen it in 10 years of activity.
The current situation, with average rates at 3.80 on the 25-year rate schedules, affects your borrowing capacity by around 17,000 euros.
With the change in rates, my room for manoeuvre will be more about the location of the property. I’ll perhaps try looking on the outskirts of Paris.