Mortgage interest rates in France rise by 0.16 percentage points in one month

Mortgage interest rate development France 2022/2023 – Source: Observatoire Crédit Logement/CSA

Nothing can stop the increase in real estate loans anymore. Despite the ceiling imposed by the government in the fight against ‘usury’, the banks continue to increase the interest rate for private financing of a house or an apartment as much as possible. While the average mortgage interest rate remained stuck at 2.09% in October, the new average interest rate in November 2022 will already be 2.25%. That is an increase of 0.16 percent in one month. If this continues for a year, we will pay almost two percent more by the end of 2023 and exceed 4%!

Rates France mortgage interest December 2022

I fear that this rise in interest rates will not stop anytime soon. As soon as the interest rate ceilings are raised on January 1, banks will increase their rates as much as possible within the new limits. This also means that the banks are taking it easy for a while. Rather than lending money at a loss or with a very low margin, lenders prefer to postpone the files as much as possible for the time being and no longer finance projects.

In practice, rising interest rates appear to lead to a loss of borrowing capacity of approximately 10 to 15% for the average home buyer. If you regularly search online for questions such as “how much to borrow with a salary of 1,800 euros” or about “what salary to borrow 300,000 euros”, you will discover that the loan amounts are decreasing and the required income standard is increasing.

What this all means in practice should become a bit clearer in early 2023. On the one hand, French banks can make mortgages more expensive with the new ceilings. On the other hand, they will also want to achieve their targets and therefore want to take out a minimum number of real estate loans. So they cannot raise the interest rate too high, because then they will no longer earn anything. And everyone knows that there is only one thing worse for the banks than earning little. And that’s not earning anything.


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