Explore the latest trends in France’s mortgage rates for December, with averages dropping to 3.15% for 15 years and competitive lower rates.

In the realm of real estate financing, December has ushered in a notable decline in mortgage rates, as reported by various brokers. The average rates have dipped to an impressive 3.15% for a 15-year term, 3.35% for 20 years, and 3.55% for 25 years. More astute borrowers have even managed to negotiate rates as low as 3.1% for 15 years, 3.15% for 20 years, and 3.3% for 25 years. This downward trend persists despite the prevailing political uncertainties in France and the accompanying trepidations regarding the housing market.

Remarkably, it has taken nearly eighteen months to revert to a landscape where no average mortgage rate exceeds the 3.50% threshold. The current averages stand at 3.22% for 15 years, 3.33% for 20 years, and 3.47% for 25 years. In this context, the tantalizing prospect of achieving a rate of 3% by early 2025 appears increasingly plausible. 

Moreover, borrowers are not only benefiting from favorable credit conditions but are also capitalizing on a nationwide price decline of 2.1% as of November 1. This reduction translates into tangible benefits, allowing prospective homeowners to acquire additional square meters: 11.43 m² in Nantes, 9.66 m² in Toulouse, and 9.01 m² in Reims. Even in the illustrious Paris, buyers can now secure an extra 3.04 m² compared to the previous year.

The latest data indicates a decrease in rates, averaging between 5 to 15 basis points. Banks, eager to meet their ambitious production targets for 2025, are deploying innovative strategies to invigorate the real estate loan market. This proactive approach is evidenced by the sustained discounts on rates offered to borrowers. Some institutions have gone so far as to introduce zero-interest envelopes specifically designed for first-time buyers, a commendable initiative indeed.

Additionally, certain banks are extending preferential rates to high-income borrowers, with some rates tantalizingly close to the 3% mark. The average rates in December reflect a modest decline of 0.05 points, settling at 3.15% for 15 years, 3.35% for 20 years, and 3.55% for 25 years, with the most favorable rates negotiated at 3.1%, 3.15%, and 3.3%, respectively.

Crucially, the borrowing capacity for households has surged by over €20,000 in 2024 for a monthly payment of €1,500 over 20 years. For a €300,000 loan over two decades, the monthly repayment has decreased by €150, thereby reducing the requisite salary to secure such a loan—while adhering to the 33% debt rule, excluding insurance—by €450 (from €5,650 to €5,200 per month). This shift effectively broadens the pool of potential borrowers.

One must ponder whether the government’s impending censorship will alter the dynamics, particularly if France’s borrowing rates experience an uptick. The 10-year government bond rates (OAT tec 10) have exhibited volatility, plummeting from 3% at the onset of June to 3.30% following the first round of legislative elections, before retreating below the 3% mark in early August. The European Central Bank’s next meeting is scheduled for December 12, a date that may prove pivotal in shaping the future of mortgage rates.