Mortgage lending: rates rise to 3,31% and activity declines in August

The rise in mortgage rates is confirmed. After remaining around 3,23% between February and June 2026, the average rate increased by three basis points in July, then again in August, to reach 3,31%, according to the Crédit Logement/CSA Observatory.

In August 2026, the average rate was 3,24% for new builds and 3,30% for existing builds. As a reminder, one basis point is equivalent to 0,01 percentage points.

A more pronounced increase in long-term loans

Since December 2025, rates on 15-year loans have increased by five basis points, compared to ten basis points for 20- and 25-year financing. They reached 3,14%, 3,27% and 3,35% respectively in August 2026.

At the same time, the average rate, across all loan terms, rose by 15 basis points. This difference is explained by the changing structure of loan production: borrowers are increasingly using longer terms to reduce their monthly payments and facilitate the completion of their financing plans.

At the beginning of the year, banks had postponed some of their pricing adjustments in order to preserve their lending volumes, despite the deterioration of the French bond and stock markets. This strategy, however, squeezed their margins.

According to the Observatory, the economic consequences of the war in the Middle East compounded existing political and economic uncertainties in France. As a result, credit institutions began raising their rates again starting in June.

Nearly one in two loans granted for at least 25 years

The average term of loans granted reached 252 months in August 2026, or 21 years. It stood at 261 months for new builds and 265 months for existing builds.

The generalization of long-term financing is accelerating: 49,3% of loans are now granted for a period of at least 25 years, compared to 46,4% in the second quarter of 2026 and 46,8% for the whole of 2025.

This extension helps to keep monthly payments down, but it is no longer sufficient to fully offset the increase in transaction costs and interest rates. Households' borrowing capacity therefore continues to decline.

Low-income households and first-time buyers are more penalized.

The return of inflationary pressures is weighing on purchasing power and complicating access to credit, particularly for low-income households and first-time buyers. Conversely, borrowers with higher incomes and larger down payments are gaining increasing market share.

The average income of borrowers increased by 1,5% in the first eight months of 2026 compared to the same period in 2025. This increase remains significantly lower than that of the cost of financed operations, which rose by 3,1%.

In August, the relative cost of an acquisition represented 4,2 years of revenue. Despite its recent increase, this level remains lower than those observed in 2021 and 2022.

The average down payment increased by 1,1% in the first eight months of 2026, after having fallen by 3,4% in 2025. The Observatory nevertheless points out that its level has generally stabilized since 2023. The recent increase is mainly due to the return of wealthier borrowers and a growing number of transactions carried out after the resale of another property.

Under the combined effect of rising property prices and interest rates, the solvency indicator of demand is deteriorating significantly.

Credit production declines during the summer

After a hesitant start to the year, the market benefited from a seasonal rebound in March and April. The financing conditions offered by banks had temporarily supported demand at that time.

This improvement was followed by a slowdown in May, then by a recovery deemed insufficient in June. The Observatory believes that economic uncertainties, compounded by the heat waves and fires of the summer, have increased the caution of potential borrowers.

Between June and August 2026, the production of mortgage loans thus fell by 16,8% compared to the same period in 2025. The number of loans granted decreased by 14,5%.

Over the twelve-month period from September 2025 to August 2026, production has now decreased by 1,7%. The number of loans remains slightly higher, at +1,9%, but this growth has slowed considerably compared to the 38% increase observed at the end of 2025.

These results relate to the activity of the mortgage lending market excluding loan buybacks.