Extended Mortgage Loans: The New Trend in France!
Length of Mortgage Loan: 15, 20, or 25 years - How long should you be in debt for a property?
Say goodbye to the 15-year mortgages of the past, as the average mortgage duration in contemporary France tops 20 years! With banks offering loans of up to 25 years, such as Camille, a 40-something first-time home buyer, is discovering. Nowadays, the price of old housing has skyrocketed by 2.6 times since 2000, according to INSEE analysis, making it almost impossible to buy a decent apartment with a 15-year mortgage, especially in pricey cities like Paris, where property prices reach an astounding 9,000 euros per square meter.
In April 2025, the typical mortgage term granted in France averaged a whopping 249 months, or just over 20 years, up from 245 months in March, as reported by the CSA Credit Logement Observatory. Over 69% of home loans in the country were issued for over 20 years, compared to 65.5% the previous year. In this context of skyrocketing property prices after a two-year decline, and credit rates still above 3%, as the broker Pretto explains, "borrowers have no choice but to extend the duration of their loan to maintain affordable monthly payments and respect the maximum debt ratio of 35% allowed by the High Council of Financial Stability".
A Deeper Look at Real Estate Investment
Lower monthly payments derived from long-term loans can make all the difference for first-time buyers and landlords wanting to secure rent that covers loan repayments. A 25-year loan, for instance, may be the preferred option for those buying investment properties. As La Centrale de Financement puts it, "If you're buying a property to rent out, you probably want the rent to cover the monthly repayment of your loan. So you need to keep this monthly payment at a reasonable level".
Let's crunch some numbers. In May 2025, with a net monthly salary of 2,000 euros, one can borrow 101,505 euros over 15 years, 125,085 euros over 20 years, and an impressive 145,210 euros over 25 years, according to Pretto's calculations. The difference between these options can be substantial, with borrowing capacity increasing by over 44,000 euros by opting for the 25-year loan. However, extending the duration means more money spent on interest. The total interest for a 101,505 euro loan over 15 years amounts to 24,495 euros, compared to 43,070 euros for a loan over 20 years, and a hefty 65,200 euros for a loan over 25 years. The latter case represents an additional 40,705 euros in interest compared to the loan over 15 years, but considering the increased borrowing capacity, it might still be a more attractive option.
Ready for a Loan Redo?
Borrowers seeking to lighten their interest burden might consider renegotiating their loan rate. Some conditions may apply, like a difference of at least one point in interest rates, being within the first third of the loan repayment period, and having at least 70,000 euros remaining to repay. If you took out a mortgage in the fall of 2023, when rates reached as high as 4.5%, current rates of around 3.20% on average for 20-year loans could save you some money. But before you dive into the process, keep in mind that each bank's offer and conditions may vary, so it's always best to consult a professional!
^{Source: © UNSPLASH, Christine Lejoux, Head of Real Estate Service, Camille, Pretto, La Centrale de financement, Meaël Bernier, director of communication for the broker Meilleurtaux}.
^{Enrichment data: The rise in the proportion of first-time buyers, improved consumer confidence following political stability, and lower housing price dynamics and the ending of tax incentives (e.g., Pinel scheme for rental investments) are additional factors contributing to the trend of longer mortgage durations in France. [1] French Statistics Institute (INSEE) study about housing prices (November 2020), [2] Bank of France data, and [5] AGECI data}.
Investing in real estate can be made more affordable for first-time buyers and landlords with long-term loans, as seen in the increased popularity of 25-year mortgages in France. For instance, a borrower could secure a loan of 145,210 euros over 25 years, according to Pretto's calculations, which is 44,000 euros more than a 15-year loan. However, extended loans mean more money spent on interest, such as 65,200 euros for a 25-year loan over 15 years, making it crucial to consider the balance between increased borrowing capacity and the additional interest costs when deciding on the loan term.
