Good news for buyers and sellers as French mortgage rates are lowered and open for negotiation

Mortgage rates are continuing to fall across France, spurring hopes that it will further boost recovery in the property market and provide flexibility for buyers and sellers.

Lenders are also open to negotiations on mortgage rates for purchases and, according to notaires, are yet to reach their quota of ‘special’ mortgages available for those who narrowly miss out on the usual criteria. 

Interest rate cuts expected to be announced by the European Central Bank this month could further decrease rates in the coming months.

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How much have rates dropped?

Rates dropped by around 0.1% on average at the start of March 2025 compared to the month prior according to lender Vousfinancer. 

Average rates reached 3% for a 15 year mortgage, 3.20% for a 20-year period and 3.40% for 25-years.

Banks are also open to negotiating lower rates for those with the best profiles in an effort to win business amidst competition.

The lowest negotiated rates have reached as low as 2.7% for 15-year and 2.9% for 25-year mortgages. 

One further sign of positivity in the market is the presence of ‘deals’ on mortgages, Société Générale extending a promotional offer of a 2.99% rate for mortgages up to €500,000.

Originally scheduled to run in February only, it has been extended throughout March.

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“With buyers returning to the market, banks are currently pursuing a strategy of winning over new customers with the aim of being well positioned against competitors by offering attractive rates,” said Julie Bachet of Vousfinancer to BFMTV. 

This competition is backed up by a slowly-increasing number of buyers, and banks maintaining flexibility on lending criteria. 

Potential lenders in France have to see certain criteria, mostly relating to monthly income, loan-leverage to purchase price, length of mortgage etc.

However, banks are allowed to relax this criteria in up to 20% of cases for those who are close to the levels and so can still potentially offer a mortgage. 

This is largely used to help first-time buyers. 

The most recent figures from notaires state that banks are only up to a level of some 15% allowing more offers to be made if the market starts to slow. 

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Will the fall in mortgage rates continue? 

Whilst this month’s figures represent a drop of around 1% compared to the same time last year, it is still far higher than the pre-slump average of around 1%. 

Notaires, although being optimistic over the market as a whole, are uncertain if mortgage rates will continue to fall throughout the year. 

The property market is recovering from the post-Covid slump, but whether this growth will be sustained depends to a degree on the overall state of the French economy. 

Lower inflation in 2024 and stabilising prices of certain essential goods provides some hope, but political uncertainty may restrict further improvement. 

The recent rule to allow an increase in notaire fees equating to an extra €500 in taxes per €100,000 spent on a property may also deter demand. 

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