The great awakening of mortgage lending

Mortgage lending: a sharp rebound in new loans expected in 2025

In detail, borrowers took out €146,5 billion in new home loans (excluding renegotiations) in 2025, a volume up 33% year-on-year, confirming the recovery of the mortgage market in France.

This rebound is all the more significant given that 2024 marked a ten-year low, with around 110 billion euros borrowed over the whole year, far from the peaks reached in 2021 and 2022, periods during which more than 200 billion euros of loans were granted each year.

Favorable but strained credit rates

The evolution of the average mortgage rate proved favorable to borrowers over the period. According to the Bank of France, 2025 began at around 3,30% and ended slightly above 3%.

Borrowing rates have been relatively stable since mid-2025, the institution notes, while also mentioning a potentially fragile balance. Caroline Arnould, CEO of the brokerage network Cafpi, reported a "slight increase during January" in a note published at the end of the month.

She attributes this development to "the pressure on refinancing costs caused by the delays surrounding the state budget".

The burden of the cost of French debt on banks

French banking institutions remain closely dependent on France's borrowing rate, since they finance themselves on the markets at a cost close to that at which they then lend to individuals and businesses.

However, the cost of French debt reached historically high levels at the end of 2025, levels not seen for almost fifteen years, putting pressure on the financing conditions for real estate credit.

First-time buyers driving the recovery

Households buying property for the first time have largely benefited from this upturn in activity, analyzes the Bank of France, which publishes detailed data on housing credit every month.

"The number of loans granted to first-time homebuyers has been increasing faster than the number of home sales and loans to all borrowers (excluding renegotiations) since the beginning of 2025," the central bank specifies.

"Banks remain committed to supporting first-time buyers," adds Caroline Arnould, mentioning in particular supplementary zero-interest or heavily subsidized loans, reduced or waived application fees, as well as "boost" packages of around 10% of the amount borrowed.

First-time buyers take out loans to acquire their main residence over an average period of nearly 24 years, slightly longer than other buyer profiles.

Banks more profitable thanks to the return of demand

Banks also benefited from the return of their customers and current interest rates, which are favorable to their margins. The financial results for 2025, published last week, confirm this trend, with retail banking networks significantly more profitable than the previous year.

In December 2025, €12,8 billion in new mortgage loans were granted, a level slightly above the annual average, according to the Bank of France. The average interest rate remained virtually stable, rising slightly from 3,10% in November to 3,08% in December.

These rates are expressed excluding insurance and additional fees. Including all fees, the average rate charged in the fourth quarter of 2025 was 3,85% for a term of twenty years or more, i.e. approximately 43.500 euros of interest for each tranche of 100.000 euros borrowed over 20 years.

Illustrative image of the article via Depositphotos.com.