French mortgage rates: Interest rates and loans in France

Understanding French mortgage rates

Purchasing a home in France is an excellent opportunity to own property in one of the most sought-after countries in the world. While some buyers can pay cash, the vast majority must use a mortgage to complete the purchase. As a foreigner, the process can feel even more challenging, but the good news is French lenders and banks are willing to lend to international buyers. In this article, we’ll discuss the different types of French mortgages and the rates you can expect to pay.


How much can a foreign buyer borrow?

French lenders will loan up to 80% of a property’s value to foreign borrowers, but it can be difficult to secure financing. Typically, French lenders are more conservative with granting funding, and you can expect to see the loan-to-value rates differ based on your country of residence.


 Considering the exchange rate

When considering a French mortgage, it’s important to keep the exchange rate in mind. Your payments will be in Euros, so depending on exchange rates, you could pay a different amount each month. While you can’t get around this variation as an international buyer, there are things you can do to protect yourself from market changes. The best way is to create a currency exchange account that allows you to actively monitor fluctuating rates and exchange your money when it’s most beneficial. You can also fix the exchange rate using forward contracts.

As of December 2024, the exchange rate favors the dollar with 1€=$1.05.


Determining French mortgage rate eligibility

Most French banks are low-risk and more conservative than American or other foreign lenders. That said, it is possible. Our buying clients at DE TILLY PARIS always find a way to secure financing. but you must show a solid financial profile and meet numerous other criteria. These include:

      A minimum loan amount of €150,000 for UK buyers and €250,000 for EU, American, and other international buyers.

      The maximum loan amount for EU nationals is 85%, while Australian, American, and non-EU buyers have a 50% maximum outside of Paris. However, within Paris lenders can loan up to 70% to 75%.

      British buyers require a 15% to 20% downpayment, while American and other foreign buyers require 50% or more.

      You must typically obtain mortgage protection life insurance

      Loan durations range from 6 to 25 years

Other considerations that can impact your eligibility include:

 Your age

Most French mortgage lenders will only lend to borrowers under 75. While those over 60 can receive approval, you should expect additional terms.

 Income

All borrowers are subject to strict debt-to-income ratios. France has legal requirements for financial liabilities like mortgages, so your total expenses can’t exceed 35% of your total household income.

 Employment

Most banks will favor applicants with permanent employment and a steady income, but there are ways business owners and self-employed borrowers can qualify. Self-employed applicants must show three years of financial activity, and their turnover must meet qualification requirements.

 Insurance

Most borrowers must have life insurance totaling 120% of their mortgage amount.

 Property

The probability of the property’s resale can impact your chances of qualification. Newer, more updated properties are better candidates than older, more remote alternatives. However, in Paris, the market is very strong, so banks are willing to offer mortgages more easily.

 

The types of French mortgages

There’s numerous types of French mortgages foreign buyers can qualify for. Finding the one that best matches your qualifications, financial status, and lifestyle is key.

 Repayment mortgage

By far, most French mortgages are repayment mortgages with traditional, fixed-term payments. They typically have lower rates and range in length from 6 to 25 years. The three repayment mortgage types are: variable-rate, capped-rate, and fixed-rate,

 Variable-rate mortgage

Variable-rate mortgages are usually connected to the European Inter Bank Offered Rate or EURIBOR base rate. The rate you pay varies with the EURIBOR index movement. You should note that just because rates rise doesn’t necessarily mean your monthly mortgage payment will increase. The more common scenario is that your payment will stay the same, but your overall repayment term will shorten or lengthen.

 Capped-rate mortgage

Capped-rate mortgages were recently introduced into the French mortgage market. This loan type is similar to a variable rate but with set upper limits determined by the bank.

 Fixed-rate mortgage

Fixed-rate mortgages are the most popular since borrowers don’t have to worry about rate fluctuations. Foreigners are generally surprised at how low these rates often are and the relatively low risk these mortgages bring.

 Interest-only mortgage

One cost-effective option is an interest-only mortgage, but it’s rare for foreign buyers to gain approval. Additionally, the majority of these mortgages only partially cover the borrowed amount, with the remaining balance being converted to a more traditional mortgage option.

 

French mortgage rates

According to the Banque De France, French mortgage rates are stabilizing between 3.5% and 4% in December 2024. While higher than in past years, this stabilization is great news for buyers. The rates are influenced by a variety of factors, like:

      How much you’re borrowing and the current LTV rate – If you put down a larger downpayment, you often qualify for lower rates.

      The type of mortgage – i.e., fixed vs. variable rate.

      The duration of the mortgage – Shorter mortgages typically have lower rates.

      Your residence location – French residents typically receive lower rates than foreigners.

      The property – Higher-risk properties generally have higher rates.

      You – Your personal situation can determine your risk, and lead to higher or lower rates.

French mortgage calculator 

A French mortgage calculator is an essential tool for estimating your monthly payments, interest rates, and loan affordability when purchasing property in France. It helps you plan your budget by providing instant calculations based on loan amount, term, and interest rate. Use this French Mortgage Calculator to simplify your property investment planning.

Rate 3,5% (+0,34% Insurance) 500 000€ Loan 1 000 000€ Loan
15 years 3 689€/month  7 378€/month 
20 Years 3 031€/month 6 6062€/month
25 Years  2 661€/month 5 322€/month

Paying off your mortgage

If you plan to pay off your mortgage, you should be aware of possible fees. Some loan agreements require the borrower to pay more than 10% of the original loan amount. However, if your prepay the total outstanding amount, this minimum amount won’t apply. Additionally, you could be forced to pay penalties to the bank for early repayment, except under the following conditions:

      The death of your or the person you live with

      You or the person you live with a dismissed from your profession

      You or the person you live with sell the property due to a change in workplace

 

Understanding French mortgages and rates will help you make the right financial decision when purchasing a property in France. Whether you’re a resident or foreigner, understanding the borrowing process can make owning a home easier. At DE TILLY PARIS, we will introduce you top mortgage brokers in France to secure your future dream home in Paris.

What are the current mortgage interest rates in France for 2025?

As of 2025, mortgage interest rates in France have been decreasing to 3.5%. The average interest rate for new mortgage loans is now more favorable compared to the rates in 2023-2024, making it an ideal time for buyers in France to consider financing options.

Yes, Americans can secure a mortgage in France if they have a stable income, good credit history, and meet French banking requirements.

France benefits from a stable economy and ECB policies aimed at promoting borrowing and investment, keeping rates historically low.

To buy property in France with the current mortgage rates, you should first assess your financial situation, then consult with a bank or mortgage broker to explore available mortgage loans. It’s advisable to compare different offers to find the best terms that fit your needs.

There are several types of loans in France available for residential properties, including fixed-rate mortgages, variable-rate mortgages, and interest-only loans. Each type has its own advantages and is suited for different financial situations and preferences.

Yes, in addition to the mortgage interest rates, buyers in France should be aware of additional costs such as notary fees, registration fees, and possibly a wealth tax, depending on the total value of the purchased property. For more information please read our article on French Tax HERE

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Picture of Marius
Marius

Your Expert on Real Estate and Investment in Paris

Reset password

Enter your email address and we will send you a link to change your password.

Get started with your account

to save your favourite homes and more

Sign up with email

Get started with your account

to save your favourite homes and more

By clicking the «SIGN UP» button you agree to the Terms of Use and Privacy Policy