Above 5.4%, French banks can no longer lend money.

In France, a legal rule called the taux d’usure caps the total cost of a loan (interest + fees + insurance). For typical fixed home loans of 20+ years it is now 5.4%. Banks cannot legally offer a loan whose overall rate exceeds this. Rising bond yields raise banks’ funding costs, so if market rates push the total above the cap, new lending in that category is blocked.

Above 5.4%, banks can no longer lend money… pic.twitter.com/IqTJGAFw9I

— The Assembly (@InTheAssembly) October 4, 2026

French 10-year yields hit 4.865% as debt fears spread through Europe

https://www.reuters.com/world/europe/french-bond-contagion-fears-are-rattling-euro-2026-10-05/

France’s 10-year yield remains close to 4.9%, while the spread over German debt has reached levels not seen since the euro-zone debt crisis era. Reuters says investors are selling French bonds amid concerns over the country’s budget, debt and political instability.

September 30, 2026 — France’s new 5.4% mortgage ceiling takes effect

https://www.service-public.gouv.fr/particuliers/actualites/A17054

The French government confirmed that from October 1 the usury ceiling for fixed mortgages of 20 years or longer is 5.4%. The ceiling includes the all-in TAEG rather than merely the advertised mortgage interest rate.

And there is already very little room for rates to rise indefinitely.

September’s market mortgage rate for 25-year loans was about 3.74% before insurance, according to PAP. The maximum quoted market rate was 4.65%.

That means the 5.4% ceiling isn’t currently blocking the entire mortgage market. But the gap can narrow if bond yields and lender costs continue rising.