Apart from Greece, France is the only major European country where interest rates are still around 3% and struggling to fall. The fault lies in the political chaos in which the Barnier government is entangled and which is causing serious tensions over the debt. Even Portugal (2.5%) and Spain (2.76%) have left France behind. Not to mention Germany where the interest rate is close to 2%. Enough to fear a rise in mortgage rates in France.
A scenario which, for the moment, seems excluded, according to brokerage experts. “The banks are on hold for 2025, particularly for the first half of the year, unless France’s interest rate soars. Some banks have planned to increase their production by 10% compared to 2024», analyzes Sandrine Allonier, from Vousfinancer who rather fears an impact on the demand for credit, deprived of an extended zero-rate loan or an exemption from tax on donations for the purchase of a new home, in case of government censorship. Maël Bernier, from Meilleurtaux, is more cautious. “It’s a big leap into the unknown that awaits us if the government is censoredanalyzes this brokerage expert. How will the financial markets, that is to say those which lend money to the State but also to the banks, react? When you lend money, you like to know if your debtor is reliable.»
For the moment, mortgage rates continue to fall. Over 20 and 25 years, they fell below 3.5% on average. “We have negotiated, for the best files, rates of 3.1% over 20 years and 3.25% over 25 years.», confides Caroline Arnould, general manager of the broker Cafpi who believes that the prospect of rates at 3% at the start of 2025 is “realistic“. “An appreciable scenario, particularly for households purchasing housing for the first time.
All profiles are winners
First-time buyers are only waiting for one thing: for credit rates to continue to fall. So far, the operation is not bad. In one year, 20-year rates fell by around 1 point (from 4.3% to 3.35%, excluding insurance). Which is equivalent to an average increase in borrowing capacity (for a loan of 300,000 euros over 20 years) of around 21,000 euros, according to the broker Vousfinancer, and even 30,000 euros for a borrower who earns 4,000 euros gross per month , according to broker Pretto. And gains of 3 to 11 m² on the surface area of the housing that a household can acquire, estimates the broker Cafpi (see below).
All profiles are winners. A couple who earn 4,000 euros net income per month and plan to buy a 70 m² apartment in Angers (49), have seen their borrowing capacity increase by more than 18,400 euros over the last 12 months, thanks to a drop in interest rates. ‘around 1 point over 20 years (4.3% to 3.35%). The same goes for a single person who earns 2,500 euros per month and wants to acquire a 50 m² home in Reims (51), even if his gain in purchasing power, linked to a drop from 4.5% to 3.5% in one year, is slightly lower: around 16,400 euros in one year. The operation is also beneficial for older people: a 55-year-old couple who earns 6,000 euros net per month can borrow nearly 287,000 euros, an increase of more than 19,000 euros in one year, with a view to acquiring a 90 m² in Fontainebleau (77).
Despite these one-point reductions in rates, “buyers still feel like they have lost purchasing power», Says Pierre Tarrade, president of the Chamber of Notaries of Paris. Because they are still missing more than 40,000 euros to compensate for the loss in purchasing power caused by the surge in rates between the start of 2022 and the fall of 2023. And yet, buyers can also count on a drop in property prices and a increase in wages.
