Mortgage rates rise again in 2026

Mortgage rates have increased again in October 2026, with average rates for 20-year loans reaching 3.66%, up from 3.38% the previous month, according to broker Pretto. This follows a trend of rising financing costs for borrowers.

Rising bond yields increase financing costs

The increase in mortgage rates is partly linked to the rise in the yield of 10-year French government bonds (OAT), which affects the cost of financing for banks. This, in turn, leads to higher mortgage rates for borrowers.

Borrower insurance adds to mortgage costs

Borrower insurance, often purchased directly from the lending institution, can add several tens of thousands of euros in costs over the life of a loan. This insurance covers the repayment of a loan in case of death, disability, or other events, though it is not legally required.

Savings possible with alternative insurance

Individuals are not obligated to take the insurance offered by their bank. By choosing a competing insurance contract, borrowers can sometimes save up to 10,000 euros over the life of their loan, depending on their profile and the terms of the insurance.

Insurance costs vary based on borrower profile

The cost of borrower insurance depends on the borrower’s age, health, profession, and the amount insured. Rates can also vary significantly between insurers, with younger, non-smoking individuals in low-risk jobs typically benefiting from more competitive rates.

Cheaper insurance can improve loan approval

Cheaper insurance can help borrowers secure a mortgage, especially when interest rates are rising. It can lower the effective annual rate (TAEG), which includes loan interest, fees, and insurance costs, potentially helping borrowers stay below the legal usury rate.

Insurance can be changed at any time

Since the Lemoine law of 2022, borrowers can change their borrower insurance at any time, even after the loan has started. However, the new insurance must provide at least the same level of coverage as required by the bank.

Choosing the right insurance is crucial

When selecting a new insurance contract, borrowers should consider more than just the monthly cost. They should compare guarantees, exclusions, deductibles, and the total cost over the remaining loan term to ensure they are not sacrificing essential protections for lower fees.