As of January 2025, the French mortgage market is experiencing a period of stabilisation and gradual improvement. Following a significant slowdown in mortgage lending growth due to elevated interest rates, the market is showing signs of recovery. In 2024, the Eurozone witnessed its slowest mortgage lending growth in a decade, with projections indicating a return to growth from 2025 onwards.
Current Mortgage Rates:
Mortgage interest rates in France have been on a declining trend. In the second quarter of 2024, the average mortgage interest rate stood at 3.49%, up from 2.89% during the same period in 2023. By August 2024, rates for 15-year loans were approximately 3.21%, 3.29% for 20-year loans, and 3.34% for 25-year loans. These rates are expected to continue decreasing into 2025, making borrowing more accessible for potential homeowners.
Mortgage Availability:
The availability of mortgages in France remains robust, with banks offering loans covering up to 85% of a property’s value. For non-EU nationals, the loan-to-value (LTV) ratio typically ranges between 50% and 75%. French citizens and permanent residents may have the opportunity to borrow up to 100% of the property’s value, sometimes requiring a certain percentage to be deposited into a savings account with a French bank. Lenders assess applicants based on income, employment stability, and existing debts, ensuring borrowers can manage repayments effectively.
Market Trends:
The French real estate market is experiencing a soft landing, with property prices stabilizing after previous increases. In the first nine months of 2024, sales of houses and apartments decreased slightly by 1.6% and 3.1%, respectively, compared to 2023. The recent decline in interest rates to around 3.6% for mortgage loans has begun to positively impact the market.
However, rental property investments have declined, accounting for only 27% of acquisitions. A market revitalisation is anticipated by the end of 2024 and into 2025, though there are concerns that decreasing interest rates may lead to another surge in property prices.
In summary, as of early 2025, France offers favorable conditions for mortgage seekers, with declining interest rates and accessible loan options. Prospective buyers should stay informed about market trends and consult with financial advisors to navigate the evolving landscape effectively.
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