After having fallen by one point since their peak of 4% reached two years ago, real estate loan rate have been stagnant since last spring. They even increase, slightly, of the order of 0.10 pointsin certain banks, forced to pass on to their customers the increase in their financing costs on the financial markets. The yield on the equivalent Treasury bond (OAT) at 10 years, that is to say the remuneration demanded by international investors to lend to France on the financial markets, has in fact increased from 3.13% last May to 3.51% this Wednesday, October 8, due to the deterioration of the country’s public finances and its political instability. During the single day of Monday, the OAT rate jumped to 3.60%, upon the announcement of the surprise resignation of the very recent Prime Minister Sébastien Lecornu.
Gold “the suspension of pension reform” of 2023, a possibility raised Tuesday evening by the resigning Minister of Education, Elisabeth Borne, to try to convince the left to form a government and provide France on time with a budget for 2026, “would (even) do more harm to an already nervous bond market than the resignation of Sébastien Lecornu”warns Ludovic Huzieux, general manager of Artémis Courtage, during a press conference this Wednesday. Because “the resignation of the Prime Minister is above all a political event while a suspension of the pension reform would further deepen public finances»he explains.
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Real estate loan rates between 3.40% and 3.50% at the end of 2025
The resigning Minister of the Economy Roland Lescure declared this Wednesday that a suspension of the pension reform would cost France “hundreds of millions of euros in 2026 and billions in 2027”. Figures which should greatly displease the financial rating agencies Moody’s and Standard and Poor’s, which will respectively update France’s solvency rating on October 24 and November 28, lowered by their colleague Fitch a few weeks ago. However, a downgrade in a country’s credit rating generally leads to an increase in the rates at which investors lend to it on the markets, since they consider it more risky.
“Via the rise in France’s borrowing rates, a suspension of pension reform could trigger a increase in mortgage rates»esteemed by Capital Caroline Arnould, general manager of the broker Cafpi. “But that would probably not be not a sudden explosionrather a gradual rise over several months”she adds, imagining an average credit rate of 3.40% in the coming months, compared to 3.20% today. In the same way, Ludovic Huzieux anticipates “A increase in the cost of credit without violencewith an average credit rate of 3.50% by the end of the year. Which will not change the face of the world” for the borrowers.
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Lecornu attentive to French credit rates
Their colleague Sandrine Allonier, spokesperson for the broker Vousfinancer, sees in this regard “good news” in the speech given by Sébastien Lecornu this Wednesday morning. The resigning head of government assured that the political parties with whom he is talking to try to get out of the political crisis share “the will of provide France with a budget before December 31 2025, (in particular) to reduce the public deficit, a key element for France’s ability to borrow, (via its) impact on interest rates. And what is true for the State is also true for household credit rate».
Words which testify to a true awareness of “the impact of political decisions on financing, particularly real estateFrench», welcomes Sandrine Allonier. Sébastien Lecornu, who did not say a word this morning about a possible suspension of the pension reform, will present this evening to the President of the Republic “solutions” to get out of the political crisis.
