Mortgage Loans in France 2026

How French Mortgages Work

The French mortgage market is shaped by a prudential framework that is stricter than in many other European countries. Fixed-rate loans dominate the market: the share of fixed-rate production has consistently sat above 95% in recent years, according to the Banque de France. This historical preference reflects a culture of long-term budget predictability.

The HCSF (High Council for Financial Stability) sets binding lending rules, supervised in the field by the ACPR (Autorite de Controle Prudentiel et de Resolution). Since the rules became legally binding in January 2022, French banks must respect a 35% debt-to-income cap and a 25-year maximum term, with limited flexibility to deviate.

French banks pay close attention to job stability (a CDI, the open-ended employment contract, is the reference), saving behaviour and overall financial discipline. The flip side of this caution is a more predictable system: once approved, you have a contract that will not surprise you with sudden payment increases.

What Lenders Look At

The 35% Debt-to-Income Cap

The HCSF rule states that total monthly debt instalments (mortgage, consumer loans, etc.) plus borrower insurance cannot exceed 35% of the borrower's net income. On a 4,000 EUR net monthly income, total debt repayments cannot exceed 1,400 EUR. This is now a binding rule, not a guideline.

In practice, this constraint shapes how much you can borrow. On a 300,000 EUR property with a 15% down payment (45,000 EUR), the loan would be 255,000 EUR. With a longer term you reduce the monthly payment, but you increase the total interest. If the calculation pushes you above 35%, either a larger down payment, a longer term or a co-borrower is usually required.

Down Payment and Closing Costs

There is no regulatory minimum down payment in France, but most banks expect at least 10% of the purchase price, with 15-20% being common for resident buyers. Beyond the down payment, buyers also need cash for the so-called notary fees, which mainly correspond to taxes and registration charges. They run around 7-8% of the price in the existing-property segment and 2-3% on new builds.

On a 300,000 EUR existing property with 15% down, you should budget around 45,000 EUR for the down payment plus roughly 22,500 EUR for notary fees, on top of arrangement and guarantee costs. Most banks expect these closing costs to be paid from your own funds rather than financed by the loan.

Non-residents typically face stricter expectations: a down payment of 30-40% is not uncommon, fewer banks operate in this segment, and supporting documents for foreign income are reviewed in detail. EU citizens benefit from a more straightforward path than non-EU nationals.

Employment and Profile

A CDI (open-ended contract) is the gold standard for French lenders. CDD (fixed-term), self-employed or freelance borrowers can also obtain mortgages, but typically need a longer track record, often three years of profitable tax returns, and lenders may average income over the period rather than using the most recent year.

Age and end-of-loan age also play a role. Many banks size the loan so that full repayment falls before the borrower's 75-80th birthday. Borrowers in their 50s or 60s may therefore see a shorter authorised term and higher borrower-insurance premiums.

Interest Rates and Loan Types

Fixed Rate: The French Standard

Fixed-rate loans represent the vast majority of French mortgage production. The interest rate stays the same for the entire term, which means the monthly payment never changes. Current rates depend on the borrower profile, down payment, term and bank, and they evolve regularly. The Banque de France publishes monthly statistics on new mortgage rates that act as a useful baseline.

Variable Rates: Rare but Available

Variable-rate loans exist but are uncommon. They are indexed on a market reference (typically Euribor) plus a margin and are usually capped, so that the rate cannot rise above a defined ceiling. Variable rates can be attractive at inception but expose the borrower to higher payments if market rates rise.

PTZ: The Zero-Interest Government Loan

The PTZ is typically combined with a standard mortgage and personal savings. Exact ceilings, eligible operations and shares are published on service-public.fr and the website of the French Ministry for Ecological Transition.

Bridging Loans (Pret Relais)

If you need to buy a new property before selling your current one, a bridging loan covers the gap. These short-term loans (typically 12-24 months) use the equity of your existing property as security. Bridging structures need to be reviewed carefully, including what happens if the original property takes longer to sell than expected.

TAEG and Usury Rate

The TAEG (Taux Annuel Effectif Global) is the official total-cost indicator required by the French Consumer Code. It expresses the annual cost of credit as a percentage and includes interest, arrangement fees, the cost of the guarantee, borrower insurance when imposed and broker fees when paid by the borrower. The TAEG is the figure to compare across offers, not the nominal rate alone.

The usury rate (taux d'usure) is the legal maximum TAEG for each loan category, calculated and published by the Banque de France. Since 2023 the publication has been monthly, instead of quarterly, which allows the cap to adjust more quickly when market rates move. If the TAEG of an offer exceeds the usury rate in force, the offer cannot legally be granted.

The usury mechanism protects borrowers from excessive lending costs but can also block some files, in particular older applicants or those with higher insurance premiums. Choosing a competitively priced borrower insurance is often the most effective lever to keep the TAEG below the ceiling.

Borrower Insurance and the Lemoine Law

Borrower insurance (assurance emprunteur) is not legally compulsory, but banks systematically require it. It covers death, total and permanent loss of autonomy (PTIA) and, in most cases, temporary or permanent incapacity. The cost can represent a meaningful share of the total cost of credit, which is why it is integrated into the TAEG.

Since the Lagarde Law of 2010 and the Hamon Law of 2014, borrowers have been allowed to choose an external insurer (delegation d'assurance) instead of the bank's group policy, provided equivalent cover. The Lemoine Law of 28 February 2022 went further: borrowers can now cancel and switch borrower insurance at any time, free of charge, for all existing contracts. The same law removed the health questionnaire for loans up to 200,000 EUR per insured person whose repayment ends before age 60.

The same family of consumer-protection rules covers other insurance products, including the regime described on our Hamon and Lemoine Law page.

Closing Costs and Loan Guarantees

Notary Fees (Frais de Notaire)

Despite the name, the bulk of notary fees corresponds to taxes and registration charges collected by the State, not to the notary's own remuneration. They are usually around 7-8% of the price for existing properties and 2-3% for new builds, with detailed scales fixed by decree. On a 300,000 EUR existing home, that means roughly 21,000-24,000 EUR of fees.

These amounts are paid at signing from the buyer's own funds. Banks rarely finance them through the mortgage itself, so they should be budgeted alongside the down payment.

Arrangement, Valuation and Guarantee Fees

Banks usually charge arrangement fees (frais de dossier) ranging from 500 to 1,500 EUR, sometimes negotiable, plus valuation fees for the property. Above all, they require a guarantee on the loan, in three main forms:

A conventional mortgage charge (hypotheque conventionnelle) is registered with a notary and gives the bank a right to sell the property in case of unpaid instalments. It triggers registration fees and, if the property is sold before the loan ends, mainlevee fees. The IPPD (privilege de preteur de deniers) follows the same logic but is exempt from the taxe de publicite fonciere, which reduces its cost; it can only be used for existing properties (not off-plan).

A surety guarantee (caution), typically provided by a specialised company such as Credit Logement, avoids the notary registration and gives rise to a partial refund of the mutualised funds at the end of the loan. The choice depends on the bank's policy and the borrower profile.

The Application Process Step by Step

Step 1: Financial Assessment and Pre-Approval

Estimate your maximum monthly payment using the 35% rule, list the cash available for the down payment and closing costs, and obtain a written pre-approval from a bank or broker. Pre-approval is not binding, but it tells sellers that your financing is grounded.

Step 2: Sign the Preliminary Contract

When you find a property, you sign a compromis de vente or a promesse de vente. The French Consumer Code imposes a condition suspensive d'obtention du pret, lasting at least one month (often extended to 45-60 days). If you cannot obtain a mortgage during this period, your deposit is returned. Buyers also benefit from a 10-day cooling-off period after signing.

Step 3: Submit the Formal Mortgage Application

Submit identity documents, the last three months' pay slips, the last tax return (or three for self-employed borrowers), several months of bank statements, the signed preliminary contract, and documentation of any existing debts. The bank then assesses the property, the income and the debt ratio.

Step 4: Receive and Accept the Mortgage Offer

If the application is approved, the bank issues a formal offre de pret (article L. 313-24 of the French Consumer Code). The borrower benefits from a mandatory 10-day reflection period: the offer cannot be accepted before the 11th day following receipt. The offer must remain valid for at least 30 days.

Step 5: Sign the Final Deed at the Notary

The final acte authentique de vente is signed at the notary's office. The bank releases the mortgage funds, the buyer pays the remaining down payment and closing costs and receives the keys. The full process, from offer to final signature, typically takes two to three months.

Working with a Broker

Mortgage brokers (courtiers en credit immobilier) are widely used in France and are regulated as IOBSP (intermediaries in banking operations and payment services) under the supervision of the ACPR and ORIAS. They work with multiple lenders, can negotiate conditions and handle a large part of the paperwork.

Their fee model varies: some are paid by the lender (no fee for the borrower), others charge an upfront commission, often around 1% of the loan amount. For complex profiles, including non-residents and self-employed applicants, broker expertise can be particularly valuable.

Before signing with a broker, check their ORIAS registration, the size of their banking network and the fee structure. Brokers must provide a clear mandate explaining how they are remunerated.

Mortgages for Non-Residents and Expats

Non-residents can borrow in France, but conditions are stricter: down payments are often 30-40%, fewer banks participate in this segment, and the documentation required for foreign income is more detailed. EU citizens benefit from a regulatory advantage compared with non-EU nationals.

Lenders typically assess borrowing capacity in euros, applying conservative conversion rates if income is in another currency. International divisions of large French banks and brokers specialised in cross-border mortgages are often the best entry point for non-residents.

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Frequently Asked Questions