Why Mortgage Interest Rates Are Set to Rise Again

Mortgage interest rates could continue to climb in the coming weeks. In early September, banks were lending at an average rate of 3.5% over twenty years, a figure that had already been trending upward in recent months.

This trend is driven in part by pressure on the ten-year French Treasury bond (OAT), a key benchmark to which mortgage rates are closely tied. When the yield on this government bond rises, banks typically pass the increase on to borrowers in the form of higher lending costs.

A Direct Impact on Homebuying Power

Rising mortgage rates have a direct effect on households' borrowing capacity, mechanically reducing the amount they can borrow for a given monthly payment, or increasing the total cost of their loan for an equivalent borrowed amount.

If this upward trend is confirmed in the weeks ahead, as some market observers anticipate, it could weigh on the property market, which has already been marked in recent years by significant shifts in financing conditions.

The precise factors behind the pressure on the ten-year OAT, as well as the expected scale of the credit rate increase in the coming weeks, have not been detailed beyond the elements mentioned.