Variable and capped-rate mortgages in France

Fixed, variable, capped: what are we talking about?

Sources: ABE Info Service; service-public.gouv.fr (page F16123).

The cap in practice. ABE Info Service gives two examples: a loan at 3.5% capped at 1 point cannot exceed 4.5% a year; a loan at 3.5% capped at plus or minus 1.5 points moves between 2% and 5%. The contract sets this ceiling: check whether it applies to rises only, or to falls as well (ABE Info Service).

Monthly payment or term. Depending on the contract, a change in the rate alters the amount of the monthly payment and/or the repayment period (ANIL; ABE Info Service). A rise absorbed by the term keeps the monthly payment stable but lengthens the loan.

The reference index and the introductory rate

The variable rate is calculated from an index written into the contract (ANIL). Service-public.gouv.fr cites the euro area interbank rate as an example. Check in the offer:

• which index is used and where it is published;
• any cap, upwards and downwards;
• the effect of a revision: on the monthly payment, on the term, or both.

Beware the introductory rate. For a variable-rate loan, ANIL (the national housing information agency) recommends not relying on the rate for the first period, which is often a taux d’appel (teaser rate).

What the loan offer must contain

For a loan with a variable or adjustable rate, the offer comes with an explanatory note setting out the terms and conditions for varying the rate, and an information document containing a simulation of the effect of a rate change on the monthly payments, the length of the loan and the total cost of credit (Consumer Code, art. L313-25). This simulation is indicative: it does not commit the lender to how rates will actually move (art. L313-25).

For a fixed-rate loan, the offer instead includes an échéancier (repayment schedule) that splits each instalment between capital, interest and insurance (ABE Info Service). The common rules apply: the offer binds the bank for at least 30 days, and you can only accept it after a 10-day cooling-off period (ABE Info Service).

Comparing two offers. Compare the TAEG, not the interest rate alone (service-public.gouv.fr). For a variable rate, also compare the worst-case scenario: the ceiling rate allowed by the cap. Our guide on taux immobilier (mortgage rates) explains what the TAEG includes.

Keeping the borrower informed during the loan

For a variable or adjustable-rate mortgage, the lender must, according to ABE Info Service:

1. tell you free of charge every year the capital still to be repaid;
2. if the rate changes, inform you free of charge, in writing or on another durable medium, before the change takes effect;
3. state in this information the amount of the instalments after the change and any change to the repayment period.

Renegotiating a variable-rate loan. If you renegotiate with your bank, the avenant (amendment to the loan contract) must set out the terms and conditions for varying the rate, with the TAEG calculated on the future instalments and charges only. You have a 10-day cooling-off period from receipt of this information (Consumer Code, art. L313-39). See our guide on renégocier son prêt immobilier (renegotiating your mortgage).

The usury rate for variable-rate loans

The taux d’usure (usury rate) caps the TAEG at the time the loan is granted. It is equal to the average effective rate charged in the previous quarter for the same category of loans, plus one third (Consumer Code, art. L314-6, cited by the Banque de France). Variable-rate mortgages form a separate category:

Source: Banque de France, published on 28 September 2026.

The TAEG includes in particular arrangement fees, intermediary fees and the cost of compulsory insurance and security (Consumer Code, art. R314-4, cited by the Banque de France). Cheaper borrower insurance can therefore bring an offer back under the threshold: see our guide on the loi Lemoine (Lemoine Act on borrower insurance).

Which professional to consult

A courtier en crédit (mortgage broker) compares a variable or capped-rate offer with fixed-rate offers, costing the ceiling-rate scenario and checking the TAEG against the usury threshold. If the loan is secured by an hypothèque légale du prêteur de deniers (lender’s statutory mortgage), the notaire (notary) registers it with the service de la publicité foncière (land registration office) (service-public.gouv.fr). To gauge your budget, use our calculateur de capacité d’emprunt (borrowing capacity calculator).