Mortgage rates drop slightly in May

According to Pretto data, the average rates observed in April are as follows:

• 2,89% over 15 years
• 2,99% over 20 years
• 3,05cc% over 25 years

National rates in May 2025:

After a turbulent April economically, rates are falling again

Launched on April 2nd, Liberation Day, Donald Trump's tariff war shook the global economy. By raising its tariffs by 10% and imposing surcharges on all its trading partners (with the exception of Russia), America triggered a wave of panic on the stock markets, which fell for several days in a row. A crash that did not spare the American bond market. And it was the rise in the T-Bond (+0,5 points) and doubts about the US solvency that ultimately forced the president to back down. The 90-day pause in these additional tariffs, far from removing all uncertainty about the future, at least calmed the financial markets.

It is in this unstable context that we are seeing a stabilization or even a decline in real estate rates. This decline is due to the level of the OAT, which is down sharply (3,3%), allowing banks to borrow at a lower cost and encouraging them to review their rate structure.

The ECB, ally of the European economy - and of borrowers

The ECB's latest cut in key interest rates on April 17 confirms the central bank's policy of supporting the European economy. By lowering its rate from 2,5% to 2,25%, it allows businesses—including banks—to benefit from cheaper money. The stated aim is to stimulate investment.

National banks, which borrow on the financial markets, therefore have more room to maneuver to offer lower interest rate schedules. This will support their policy of winning over young people and first-time buyers. For several months now, many of them have been multiplying attractive offers and other discounts for the best profiles, who are offered preferential interest rates.

This decision comes at a perfect time, as the real estate market confirms its recovery in the first quarter of 2025. Rising demand, a slight drop in prices (-1,9% according to a Bien'ici study) and falling property rates provide the perfect combination to kick off the traditional spring real estate season.

For Pierre Chapon, co-founder of the Pretto group: "Despite recent economic and geopolitical upheavals, the downward trend in interest rates is expected to continue in the coming months. Barring any major new shocks, we anticipate average rates around 3% this summer. This is good news for borrowers as the real estate market recovers."

The PTZ, a real game changer for borrowers

Long heralded, the expanded zero-interest loan came into effect on April 1st. Income ceilings revised upwards, zoning ended, new single-family homes were included in the scheme... The new version of the zero-interest loan offers a real breath of fresh air to borrowers, who have seen their real estate purchasing power eroded by the increase in rates from 2022 to the end of 2023. By covering up to 50% of the purchase amount, the zero-interest loan improves buyers' borrowing capacity while allowing them to save on the cost of their credit. A win-win situation that makes it a real asset.

For Pierre Chapon, co-founder of the Pretto group: "Better managed by banks and announced with great fanfare, the expanded zero-interest loan (PTZ) is a real game changer for borrowers. It will undoubtedly become essential for all those who are eligible. With 55% more PTZs compared to the same period last year, we can see that the trend is already well underway."

Customer case:

Let's take the example of a young couple of first-time buyers looking to buy an apartment in Asnières, Hauts-de-Seine (92). With their €70.000 net annual income before taxes and their €40.000 deposit, they can aim for a property worth €300.000 in an existing property. To which must be added €28.000 in fees (notary, bank, broker). Total amount borrowed = €288.000. Rate obtained: 3,2% over 25 years. Monthly payment: €1.410. And what about a new property?

• With the zero-interest loan required, their borrowing capacity gets a serious boost: €360.000, or €60.000 more (or 9 m², if we take into account average prices in the municipality). They benefit from €110.000 in PTZ and €30.000 in Action Logement loans, or €140.000 in subsidized loans (nearly 50% of the credit).
• Since notary fees are reduced for new builds, they only have to add €16.000. Total amount borrowed = €336.000.
• For new builds, their monthly payment still stands at €1.410, but their average rate (combining their various loan lines) falls to 1,92%. And the impact on the total cost of the loan is enormous. Expect €131.000 for existing builds compared to €87.000, or €44.000 less on the bill.

What changes from May 1st

The increase in transfer taxes (DMTO), already effective in nearly a quarter of departments since April 1, is being extended to around ten additional departments. This 0,5-point increase is not going to please buyers. For example, for a property worth €300.000, you will have to pay an additional €1.500.

Illustrative image of the article via Depositphotos.com.