Good news for buyers and sellers as french mortgage rates fall and are open to negotiation

SOME BANKS ARE OFFERING SPECIAL MORTGAGE DEALS AS PROPERTY MARKET RECOVERING – BUT WILL THIS CONTINUE? 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.  An interest rate cut is expected to be announced by the

European Central Bank this month with hope of further cuts in the coming months. Read more: Can Britons get mortgage to buy French property post-Brexit? 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. Read more: Is it right time

to renegotiate mortgage on French home? “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.  Read more: Is

French property slump ending? : Key points in latest notaire review 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, mortgage rates are still higher than the pre-slump average of around 1%.  Notaires, although being optimistic over the market as a whole, are uncertain if 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.  Read more: Which departments are raising notaire fees in France?