Most French banks are raising their mortgage rates for April amid uncertainty from the war in Iran and the Strait of Hormuz blockade. French 10-year state bond yields hit nearly 3.90% on Friday, a level unseen since 2009. Philippe Crevel of the Cercle de l’Épargne highlights the close link between these yields and home loan rates.
The war in Iran and the Strait of Hormuz blockade are not only raising fuel prices but also French mortgage rates. Several banks have announced increases to their April rate sheets, averaging 0.10 percentage point and up to 0.30 point for one lender.
On Friday, the French 10-year OAT yield climbed to nearly 3.90%, a high last seen during the 2009 subprime crisis. This rise in long-term rates directly affects consumer loans. “The two are extremely linked,” said Philippe Crevel, director of the Cercle de l’Épargne.
Banks are adjusting their offerings amid economic and political uncertainty. This uptick complicates home-buying plans for French households, as lenders typically release rate sheets in a staggered manner.
