Mortgage interest rates in August 2026: trends and forecasts

Information updated in July 2026.

How much will you actually pay each month if you borrow €250,000 this summer? Will mortgage rates continue to stabilize, or are they likely to rise again after the summer? Should you sign your mortgage offer now, or wait a few more weeks in the hope of securing better terms?

These are questions that thousands of future homeowners ask themselves when starting or finalizing a property purchase. After two years marked by a gradual decline in interest rates, the mortgage market now appears to be entering a more uncertain phase, influenced by the European Central Bank (ECB) and renewed inflationary pressures.

This article reviews mortgage rates observed at the beginning of August 2026: average rates by loan term (15, 20 and 25 years), the best rates available depending on your borrower profile, the current regulatory framework (usury rate, HCSF lending rules, and the interest-free loan scheme), monthly repayment simulations, as well as brokers' forecasts for the coming months and practical advice on securing the best possible mortgage rate.

Are you planning to buy a property and wondering whether now is the right time to borrow? Mortgage conditions are evolving quickly, and every situation depends on your deposit, financial profile and the region where you intend to buy. To refine your financing strategy and receive tailored support throughout your property search, contact your local Capifrance real estate advisor, who can also introduce you to properties across France that match both your budget and your borrowing capacity.

In summary 

1. Where do mortgage rates stand at the beginning of August 2026?

Average mortgage rates observed by brokers in July

According to the leading French mortgage brokers (Pretto, Meilleurtaux, CAFPI and Empruntis), the average mortgage rates recorded at the beginning of July 2026 were approximately:

• 3.17% to 3.20% over 15 years
• 3.30% to 3.38% over 20 years
• 3.41% to 3.45% over 25 years

These figures exclude borrower insurance and reflect the average rates negotiated for standard mortgage applications.

Overall, rates remained stable compared with June despite a less favourable monetary environment. This demonstrates banks' willingness to continue supporting mortgage lending during the summer, traditionally a quieter period for property transactions.

The best rates available for premium borrowers

Borrowers with strong financial profiles—significant personal savings, stable income, secure employment and low debt levels—continue to benefit from considerably more attractive rates than the market average:

• 3.00% over 15 years
• 3.10% to 3.20% over 20 years
• 3.20% to 3.30% over 25 years

The gap between the best available rates and average market rates can therefore reach 0.20 to 0.25 percentage points, which translates into savings of several thousand euros over the lifetime of a mortgage.

This difference clearly illustrates how the quality of a borrower's application remains one of the most important factors during negotiations.

Stability that may be misleading

Although mortgage rates appear stable at first glance, the reality is more nuanced.

Banks continually adjust their pricing grids according to quarterly commercial objectives, refinancing costs on bond markets and local competition. Some lenders even reduced their rates slightly during July in order to attract new customers before the busy autumn market, despite macroeconomic conditions that might have suggested the opposite.

This apparent stability should therefore not be interpreted as a guarantee that current borrowing conditions will last. Instead, it largely reflects competitive pricing strategies that could begin to fade as early as September.

2. Why are mortgage rates evolving this way? The role of the ECB

The ECB's June 2026 interest rate increase

After several quarters of stability—and even gradual reductions—the European Central Bank (ECB) surprised financial markets by increasing its key interest rates by 0.25 percentage points during its June 2026 meeting.

The deposit facility rate, which serves as a benchmark for banks' refinancing costs, increased from 2.00% to 2.25%.

This decision followed a renewed rise in inflation across the eurozone, which climbed back to approximately 3.2% during the spring, forcing the ECB to revise the easing cycle it had initiated in 2024.

Why banks do not react immediately

It is important to understand that ECB decisions do not immediately affect the mortgage rates offered to consumers.

French banks set their lending rates according to their own refinancing costs, but typically with a delay of two to four months.

This explains why, despite the ECB's June rate hike, mortgage rates remained broadly stable—or even declined slightly—throughout July.

What this means for borrowers

Economists and mortgage brokers now expect at least two additional ECB rate increases before the end of 2026.

If this scenario materialises, average mortgage rates could rise by around 0.20 percentage points by December.

Some brokerage networks, including Vousfinancer and Meilleurtaux, no longer rule out 25-year mortgage rates approaching 4% as early as mid-September.

For borrowers, this means that a mortgage secured today is likely to benefit from more favourable financing conditions than an equivalent application submitted later in the autumn.

3. The regulatory framework in 2026: usury rates, HCSF rules and borrower protection

The usury rate for the third quarter of 2026

The usury rate is the maximum Annual Percentage Rate (APR) that a bank is legally allowed to charge when granting a loan. It is calculated and published every quarter by the Banque de France, based on the average rates actually applied by lenders, increased by one third.

For the third quarter of 2026 (from 1 July to 30 September), the usury rate thresholds for mortgage loans are:

• 4.07% for fixed-rate loans with a term of less than 10 years
• 4.57% for fixed-rate loans with terms between 10 and 20 years
• 5.29% for fixed-rate loans with terms of 20 years or more
• 5.28% for variable-rate loans
• 6.39% for bridge loans

These thresholds are slightly higher than during the previous quarter, which is actually good news for many borrowers. A higher usury rate gives banks greater flexibility to include borrower insurance and guarantee costs within the APR without exceeding the legal ceiling.

As a result, some mortgage applications that were previously rejected because they exceeded the usury rate may now become eligible again.

HCSF lending rules: 35% debt-to-income ratio and a maximum term of 25 years

In 2026, the High Council for Financial Stability (HCSF) confirmed that its lending rules remain unchanged despite repeated requests from property professionals for greater flexibility.

The two key rules continue to apply:

• A maximum debt-to-income ratio of 35%, including borrower insurance.
• A maximum repayment period of 25 years, extended to 27 years for off-plan purchases (VEFA) or construction projects, allowing for a deferred repayment period of up to two years while construction is underway.

Banks nevertheless retain a degree of flexibility. Up to 20% of their quarterly mortgage production may fall outside these rules, allowing exceptions for specific cases, particularly first-time buyers or financially sound primary residence purchases.

Because this flexibility is limited and quickly used, the overall quality of a borrower's application remains a decisive factor.

The interest-free loan (PTZ): valuable support for first-time buyers

In 2026, the Prêt à Taux Zéro (PTZ) continues to be an extremely valuable supplementary financing solution for first-time buyers.

Extended until 31 December 2027, the scheme has also been expanded.

It can now finance:

• Up to 50% of the purchase price of a new-build property, depending on household income.
• Up to €180,000 for households of five people or more purchasing in Zone A bis, within the lowest income bracket.

Eligibility is subject to several conditions:

• You must qualify as a first-time buyer, meaning you have not owned your main residence during the previous two years.
• Your household income must fall below the applicable limits, calculated using your 2024 taxable income for applications submitted during 2026.

Repayment lasts between 10 and 25 years, with a deferred repayment period of up to 10 years, depending on household income.

The PTZ never finances an entire property purchase on its own. It must always be combined with a traditional mortgage or another financing solution, such as a housing savings loan or an Action Logement loan.

Nevertheless, it remains an excellent way to reduce the overall borrowing cost and improve borrowing capacity, particularly for young households and middle-income buyers.

4. How much does a mortgage cost in August 2026? Example calculations

Monthly repayments for €200,000, €250,000 and €300,000 over 20 years

To illustrate the impact of today's mortgage rates on a typical household budget, here are example monthly repayments based on an average 20-year fixed rate of 3.35% (240 monthly payments), excluding borrower insurance.

• €200,000 borrowed: approximately €1,145 per month
• €250,000 borrowed: approximately €1,432 per month
• €300,000 borrowed: approximately €1,718 per month

These figures are provided for guidance only and may vary depending on your lender, financial profile and additional costs such as guarantees or application fees.

They nevertheless demonstrate that even a difference of 0.10 to 0.15 percentage points in the interest rate can represent approximately €10 to €15 per month on a €250,000 mortgage—or €2,400 to €3,600 over the lifetime of the loan.

Comparing 15-, 20- and 25-year mortgages: monthly payment versus total borrowing cost

The choice of loan term has a major impact on both monthly repayments and the total cost of borrowing.

For a €250,000 mortgage, based on average market rates:

• 15 years (3.20%)
  • Monthly repayment: approximately €1,751
  • Total borrowing cost: around €65,000
• 20 years (3.35%)
  • Monthly repayment: approximately €1,432
  • Total borrowing cost: around €94,000
• 25 years (3.43%)
  • Monthly repayment: approximately €1,243
  • Total borrowing cost: around €123,000

This comparison illustrates the classic trade-off.

Choosing a longer loan term reduces monthly repayments and therefore increases borrowing capacity—particularly useful for remaining within the 35% debt-to-income limit.

However, extending the repayment period also significantly increases the overall cost of the mortgage because interest is paid over a much longer period.

Conversely, a shorter loan term reduces the total interest paid but requires substantially higher monthly repayments, meaning borrowers need sufficient income to remain within HCSF lending rules

The impact of borrower insurance on monthly repayments

The simulations above do not include borrower insurance, which is required in the vast majority of cases to obtain a mortgage.

Its cost varies significantly depending on the borrower's age, health and the level of cover required, but it generally represents between 0.10% and 0.40% of the borrowed capital per year.

For a €250,000 mortgage, this typically adds between €20 and €80 per month to the monthly repayment.

Since the introduction of the Lemoine Act, borrowers have been able to change their mortgage insurance at any time, free of charge and without penalties. Comparing insurance providers can therefore generate substantial savings, even after the mortgage has already been signed.

5. What can we expect in September 2026?

The most likely scenario: a moderate increase in rates

Most mortgage brokers and economists agree that mortgage rates are likely to increase moderately from September 2026 onwards.

The combination of the ECB's recent interest rate increase, rising bond yields and the gradual end of banks' summer promotional offers is expected to result in slightly higher mortgage rates than those available today.

Some brokers even believe that 25-year mortgage rates could approach 4% by mid-September, compared with approximately 3.43% currently.

Economic uncertainties to watch

Several factors could still influence this outlook, in either direction:

• A further increase in ECB key interest rates, should inflation remain persistent, would put additional upward pressure on mortgage rates.
• Conversely, weaker mortgage lending activity could encourage banks to ease lending conditions in order to achieve their annual commercial targets.
• Ongoing geopolitical and economic uncertainties continue to affect bond markets, making long-term forecasts difficult.

According to a recent CAFPI survey, 95% of French people no longer expect mortgage rates to fall before the end of the year, reflecting a clear shift in borrower sentiment.

Should you wait or move forward with your project?

In the current environment, most financing professionals recommend not delaying a well-prepared property purchase.

Securing today's borrowing conditions before a potential rise in rates is generally considered the safer option.

Waiting in the hope of obtaining a lower rate now appears increasingly risky: the potential for further decreases seems limited, whereas the risk of higher rates is widely recognised by market participants.

For buyers whose financing is already in place, summer 2026 may therefore represent a more favourable borrowing window than the coming autumn.​

6. How can you secure the best mortgage rate?

Build the strongest possible application

More than ever, the quality of your application remains the most powerful negotiating tool.

A personal contribution of at least 10% to 20% of the property's purchase price—enough to cover notary fees and loan guarantees—provides reassurance to lenders and often leads to more competitive mortgage rates.

Stable employment, regular income, well-managed bank accounts in the months leading up to the application and a reasonable debt-to-income ratio are all important factors considered by banks.

Lenders also pay close attention to your remaining disposable income—the amount left each month after mortgage repayments have been made.

Compare lenders or work with a mortgage broker

Interest rate differences of 0.20 to 0.30 percentage points are not uncommon between lenders for exactly the same borrower profile.

For this reason, comparing several banks is essential.

Working with a mortgage broker can save valuable time, provide access to preferential lending rates that may not be available directly through bank branches, and offer expert support throughout the application process.

Mortgage brokers also negotiate additional terms such as application fees and early repayment charges, potentially saving borrowers thousands of euros over the life of the loan.

Negotiate borrower insurance and additional fees

The nominal interest rate is only one part of the total borrowing cost.

Several other elements can significantly reduce the overall cost of a mortgage:

• Choosing independent borrower insurance, which is often considerably cheaper than a bank's group policy.
• Negotiating application fees, which are sometimes waived during highly competitive commercial periods.
• Selecting the most appropriate loan guarantee, such as a mutual guarantee instead of a traditional mortgage charge whenever possible, helping to reduce costs and simplify any future resale.

Individually these savings may seem modest, but together they can amount to several thousand euros over the life of the loan.

Contact a Capifrance real estate advisor

Finding the right property at the right price while securing the most favourable financing conditions is one of the biggest challenges facing homebuyers in 2026.

In a market where borrowing conditions can change from one month to the next, the guidance of a property professional can make all the difference.

A Capifrance real estate advisor has in-depth knowledge of the local property market, current prices and the specific characteristics of every type of property.

They can also introduce you to trusted financial partners, help optimise your financing strategy, identify potential issues with your application before they arise and save you valuable time throughout your property search.

Contact your local Capifrance real estate advisor to receive support at every stage of your purchase—from defining your budget to signing the deed before a notary.

You can also browse Capifrance property listings throughout France to refine your search according to your current borrowing capacity.

Conclusion

At the beginning of August 2026, mortgage rates remain broadly stable compared with the spring, averaging around 3.20% over 15 years, 3.35% over 20 years and 3.45% over 25 years, with even more competitive offers available for borrowers with the strongest financial profiles.

However, this stability may prove temporary. The ECB's June interest rate increase, combined with persistent inflationary pressures, suggests that mortgage rates could begin rising again from September 2026 onwards.

Key takeaways

• Average mortgage rates currently range from 3.20% to 3.45%, depending on the loan term.
• The ECB has started a new tightening cycle, which could push bank lending rates higher before the end of the year.
• The third-quarter 2026 usury rate has increased slightly, making mortgage financing accessible again for some borrowers.
• HCSF lending rules (35% maximum debt-to-income ratio and a maximum repayment term of 25 years) remain unchanged and continue to shape the French mortgage market.
• The interest-free loan (PTZ) remains a valuable financing tool for first-time buyers until the end of 2027.
• Building a strong application, providing a personal contribution and working with a mortgage broker remain the most effective ways to secure a competitive mortgage rate.

In this evolving environment, buyers with well-prepared projects generally have more to gain by moving forward now rather than waiting for a potential fall in interest rates—a scenario that currently appears far from certain.

FAQ

What is the average mortgage rate in August 2026?

At the beginning of August 2026, average mortgage rates offered by brokers are approximately 3.20% over 15 years, 3.35% over 20 years and 3.45% over 25 years, excluding borrower insurance. Borrowers with the strongest financial profiles may still obtain even better conditions, with rates below 3.10% over 20 years.

Are mortgage rates expected to rise after summer 2026 ?

This is currently the most likely scenario according to the majority of mortgage brokers and economists. Following the ECB's June 2026 interest rate increase and rising bond yields, mortgage rates could increase by around 0.20 percentage points before the end of the year, although economic uncertainty means this cannot be guaranteed.

What is the usury rate and why is it important ?

The usury rate is the maximum Annual Percentage Rate (APR) that a lender is legally allowed to charge for a loan. It is updated every quarter by the Banque de France to protect borrowers from excessive lending costs. However, when borrower insurance and guarantee costs push the APR above this legal ceiling, some mortgage applications may be refused. For the third quarter of 2026, the usury rate reaches 5.29% for fixed-rate mortgages with terms of 20 years or longer.

What are the HCSF lending rules in 2026 ?

The High Council for Financial Stability (HCSF) requires that borrowers maintain:

• a maximum debt-to-income ratio of 35%, including borrower insurance;
• a maximum repayment period of 25 years, extended to 27 years for off-plan purchases or construction projects.

These rules remain unchanged in 2026 and continue to regulate access to mortgage financing.

Is the interest-free loan (PTZ) still available in 2026 ?

Yes. The Prêt à Taux Zéro (PTZ) has been extended until 31 December 2027 and now offers broader eligibility. It can finance up to 50% of the purchase price of a new-build property, with a maximum amount of €180,000, depending on household income, family size and the property's location. It remains reserved for eligible first-time buyers. 

It depends on your financial situation and objectives.

A 15-year mortgage reduces the overall borrowing cost but requires higher monthly repayments.

A 25-year mortgage lowers monthly payments and makes it easier to remain within the 35% debt-to-income limit, but significantly increases the total amount of interest paid over the life of the loan.

Is it better to borrow over 15, 20 or 25 years ?

It depends on your financial situation and objectives.

A 15-year mortgage reduces the overall borrowing cost but requires higher monthly repayments.

A 25-year mortgage lowers monthly payments and makes it easier to remain within the 35% debt-to-income limit, but significantly increases the total amount of interest paid over the life of the loan.

How can I obtain a better mortgage rate than the market average ?

The most effective ways to secure a competitive mortgage rate include:

• providing a substantial personal contribution;
• having stable employment and a strong financial profile;
• maintaining a low debt-to-income ratio;
• comparing offers from several banks;
• working with a mortgage broker.

Negotiating borrower insurance separately from the mortgage and reducing application fees can also significantly lower the overall cost of financing.

Should I wait before buying a property ?

Given current expectations of rising mortgage rates after the summer of 2026, most financing professionals recommend not delaying a well-prepared property purchase.

Securing today's borrowing conditions rather than waiting for a possible fall in rates—which may never materialise—currently appears to be the most prudent strategy for prospective buyers.

Author :

Frédéric Rémy – Director of Commercial Performance
A real estate professional for several years within the Capifrance network, I would like to share with you some essential advice to help you succeed in your real estate project with the support of our advisors.