Mortgage lending slows in May 2026: loan production falls to €11,4 billion

Mortgage lending slowed again in May 2026. According to the latest data published by the Bank of France, the amounts borrowed by individuals to finance housing decreased for the second consecutive month. Despite a period traditionally favorable to real estate projects, the market is still struggling to regain sustained momentum.

In May 2026, the Bank of France recorded €11,4 billion in new housing loans, excluding renegotiations. This is the lowest level observed since January 2026.

This volume is also lower than that recorded in May 2025, when new mortgage loans reached 11,9 billion euros.

A less dynamic spring for the real estate market

Spring is usually a key period for real estate purchases. Many households choose this season so they can move in during the summer, while avoiding a change of school for their children mid-year.

This year, however, this seasonal dynamic appears to be more limited.

Mortgage rates have risen slightly since the beginning of the year.

Interest rate trends are partly responsible for this slowdown. According to the Bank of France, the average mortgage rate stood at 3,21% in May 2026, the same level as the average observed since the beginning of the year. In the second half of 2025, this rate averaged 3,09%.

This data relates solely to the interest rate, excluding additional costs such as borrower's insurance or broker's fees.

Including all fees, the annual percentage rate (APR) was 3,97% in the second quarter of 2026 for loans with a term of 20 years or more. At this rate, interest payments amount to approximately €45.000 for every €100.000 borrowed over 20 years.

A market still marked by the ECB's interest rate hikes

The mortgage market remains influenced by developments of recent years. Between mid-2022 and early 2024, loan production fell sharply following successive increases in key interest rates decided by the European Central Bank (ECB) to combat inflation.

Banks passed these increases on to mortgage rates. After a period of easing, these rates began to rise slightly again at the beginning of 2026.

Outstanding mortgage loans continue to grow

Despite this slowdown in new loan production, the total outstanding amount of mortgage loans remains high. At the end of May 2026, it reached €1.539 trillion.

Over the past twenty years, this outstanding amount has increased by almost 2,5 times, due to the combined effect of rising property prices and longer loan terms, which can now reach 25 years.