Mortgage lending: The ECB is taking its time, but markets remain vigilant

After raising its key interest rates in June for the first time in three years, the European Central Bank opted to pause in July. This decision, widely anticipated by the markets, does not immediately alter banks' funding conditions.

However, attention is focused on the start of the academic year, particularly on the evolution of the French 10-year OAT, the maintenance of which at a high level could gradually weigh on mortgage rates.

According to Pretto's data, the average rates observed in August 2026 are:

3,33% over 15 years
3,44% over 20 years
3,52% over 25 years

The ECB is pausing after its June hike

On July 23, the European Central Bank (ECB) decided to leave its key interest rates unchanged.

This decision was widely expected by the markets, following the 0,25 percentage point increase announced on June 11. The ECB has thus chosen to take the time to observe the evolution of the economic situation before any potential new decisions.

The message sent by the European institution is one of caution: future decisions will depend on available economic data, particularly on the evolution of inflation and growth in the euro area.

For mortgage borrowers, however, this pause does not directly change credit conditions. The ECB's key interest rates primarily influence banks' short-term financing costs. When setting their mortgage rates, banks mainly consider their long-term refinancing costs, of which the 10-year French government bond (OAT) is a key indicator.

The 10-year OAT (French Treasury bond) becomes the main point of concern.

If the ECB delays, financial markets remain particularly attentive to the evolution of the French 10-year OAT.

This indicator, which corresponds to the rate at which the French government borrows on the markets, partly reflects investors' expectations regarding inflation, growth, and the budget situation. After hovering around 3,6% at the beginning of the summer, the OAT (French government bond) crossed the 4% threshold in July, a level that is attracting particular attention from banking institutions.

However, this increase has not yet translated into a general rise in mortgage rates. Banks adjust their rates with a certain lag and are currently focused on meeting their lending targets.

On the other hand, if the OAT were to remain permanently around 4%, a gradual rise in credit rates in the coming months would become a more credible scenario.

For Pierre Chapon, CEO and co-founder of Pretto: “The ECB’s status quo was widely expected. For borrowers, the real indicator to watch is the evolution of the 10-year French government bond (OAT). As long as banks remain focused on acquiring new customers, rates should change only slightly. However, if the OAT remains around 4% for an extended period, they could gradually pass this increase on to their new lending rates.”

Regional differences remain marked depending on the profiles

Despite a more uncertain financial environment, mortgage rates remained generally stable in August. However, the terms obtained by borrowers continued to vary considerably depending on the strength of their application, as well as the region where the financing is sought.

Over 25 years, the best rates negotiated by Pretto remain lower than standard rates across all regions. The difference can reach up to 60 basis points in some areas, confirming the importance of the borrower's profile in accessing the best credit terms.

Île-de-France remains the region where the best profiles obtain the most advantageous conditions, with a negotiated rate of 3,10% over 25 years, followed by Pays de la Loire (3,12%) and Nouvelle-Aquitaine (3,20%).

Conversely, the highest rates for the best applications are observed in Corsica and Provence-Alpes-Côte d'Azur, at 3,60%, as well as in Occitanie at 3,55%.

These regional differences are, however, less significant than the gap related to borrower profile. In a context where banks continue to seek to attract the strongest applications, negotiation remains a key lever for obtaining the best financing terms.

Banks are continuing their conquest strategy

This desire to win over new customers is also reflected in the commercial offers launched by several establishments.

CEPAC has lowered the rate on its Immo+ supplementary loan to 1,99%, down from 2,49% previously, for first-time buyers financing their primary residence. This supplementary loan represents 10% of the main loan amount, up to a limit of €30.000, with a term of up to 25 years.

For its part, Crédit Agricole du Morbihan has ended the Prêt Booster Accélérateur Habitat scheme and launched its new Prêt Booster Mon 1er Toit, offered at 1,99% for first-time buyers until October 15.

Finally, the CCF continued to improve its conditions with a decrease of 0,10 points on certain profiles (couple earning 80k per year.

These developments confirm a trend observed for several months: despite a more uncertain financial context, banks remain aggressive in attracting borrowers who match their risk criteria.

According to Pierre Chapon, CEO of Pretto: “The mortgage market remains in a phase of equilibrium. Banks continue to compete fiercely to attract certain types of borrowers and offer sometimes very targeted deals. For an individual, the challenge is therefore to find the institution whose criteria best match their project. Given the diversity of banking strategies, having good guidance can make it easier to identify available opportunities and obtain the best financing terms.”

What are the prospects for the start of the new academic year?

In the short term, the most likely scenario remains one of relatively stable mortgage rates. The ECB's decision has not changed lending conditions, while banks continue to compete fiercely to attract the best loan applications.

The main element to watch in the coming weeks will therefore be less the decision of the ECB itself than the evolution of the French 10-year OAT.

If this indicator stabilizes, credit conditions could remain favorable in the fall. However, a sustained rise in the French government bond (OAT) yield could gradually force banks to adjust their lending rates.

In this context, the quality of the borrower's file remains more crucial than ever to obtain the best financing conditions.