Plusieurs personnes autour d'une table avec des documents discutant des taux des crédits

Real Estate Loans: The Symbolic 3% Threshold Has Been Crossed

Following the increase in key interest rates announced on March 16 by the European Central Bank, the average rate on real estate loans continues to rise and has now exceeded the symbolic 3% threshold, regardless of the loan term.

For longer maturities, rates are even reaching above 3.5%, directly impacting household borrowing capacity and real estate financing strategies, including in the high-end property market in Paris and internationally.

A Continuous Rise in Mortgage Rates Since 2022

Since the beginning of 2022, mortgage interest rates have been rising rapidly and steadily. This trend, combined with a high inflationary environment, is mechanically reducing households’ purchasing power by increasing the overall cost of financing.

This situation has led to a significant decline in mortgage production, mainly due to:

  • rising interest rates,

  • the restrictive level of the usury rate (interest rate cap),

  • and stricter lending conditions.

In response to these tensions, the authorities introduced a monthly revision of the usury rate instead of a quarterly revision during the first half of 2023.

A welcome adjustment, but one that is still insufficient to fully revive access to mortgage financing.

Mortgage Lending: An Increasingly Strict Regulatory Framework

Mortgage lending in France remains heavily regulated. Banks cannot grant a loan if:

  • the borrower’s debt-to-income ratio exceeds 35% of their income,

  • the APR (Annual Percentage Rate), including insurance, guarantees, and fees, exceeds the applicable usury rate.

However, the rapid rise in interest rates has led to a significant increase in monthly repayments, making the 35% threshold particularly restrictive, even for financially strong profiles.

This constraint heavily affects:

  • first-time buyers,

  • senior borrowers (strongly impacted by higher insurance costs),

  • as well as investors and high-end property buyers, whose financed amounts are typically higher.

A Key Issue for High-End Real Estate Projects

In this more complex financing environment, tailored advisory support has become essential, particularly for large-scale projects in Paris, Neuilly, Cannes, Brussels, or internationally.

High-end mortgage brokerage solutions help optimize:

  • financing structuring,

  • the overall cost of credit,

  • borrower’s insurance,

  • and compliance with regulatory thresholds.

Exell Crédit, Your Partner for Real Estate Projects

Do you have a residential or prestige investment project?

Call on the tailored financing experts at Exell Crédit, the brokerage service of the Vaneau Group.

Confidentiality, efficiency, and personalized financial engineering at the service of your real estate assets.

+33 (0) 1 45 03 80 95
contact@exellcredit.fr