How French Loans and Mortgages Work: Monthly Payment, TAEG, and Insurance (2026)

Most French home loans and consumer credit use a standard amortizing structure called a pret amortissable. You borrow a fixed sum, repay it in equal monthly instalments over a set term, and pay a fixed interest rate. Understanding how the monthly payment is calculated, and what the TAEG covers, helps you compare offers and plan your finances accurately.

How an amortizing loan (pret amortissable) works

Every monthly instalment (mensualite) covers two things: interest on the outstanding balance, and a repayment of part of the capital. In the early months, the outstanding balance is large, so most of the payment goes toward interest and only a small portion reduces the capital. As the balance falls over time, the share going to interest shrinks and the share going to capital grows. The total monthly payment stays constant throughout, which is why this structure is called an annuity loan.

The monthly payment formula

The formula for the fixed monthly payment is: payment = P x r / (1 - (1 + r)^(-n)), where P is the loan principal, r is the monthly rate (annual rate divided by 12), and n is the total number of monthly payments (years multiplied by 12). If the rate is zero, the payment is simply P divided by n.

Worked example: 200,000 EUR at 3.5% over 20 years

Step 1: convert the annual rate to a monthly rate. r = 3.5 / 100 / 12 = 0.002917 per month. Step 2: count the total payments. n = 20 x 12 = 240 months. Step 3: apply the formula. payment = 200,000 x 0.002917 / (1 - (1.002917)^(-240)) = 583.33 / (1 - 0.4971) = 583.33 / 0.5029 = 1,159.92 EUR per month.

Over the full 20-year term, you make 240 payments of 1,159.92 EUR, repaying a total of 278,380 EUR. The total interest paid is 278,380 minus 200,000 = 78,380 EUR. That is the cost of borrowing at this rate and term, before adding assurance emprunteur.

What the TAEG includes

French lenders must quote a TAEG (taux annuel effectif global) alongside the nominal rate. The TAEG combines the nominal interest rate with all compulsory costs: assurance emprunteur, arrangement fees (frais de dossier), valuation fees, and any other charges that must be paid to obtain the loan. Because the TAEG captures the true total cost of credit, you should always compare TAEG figures across different lenders, not just the nominal rate.

Assurance emprunteur: the insurance premium

Assurance emprunteur is a life and disability insurance policy that most French lenders require for mortgage loans. It protects the lender if you become unable to repay due to death, total disability, or long-term incapacity. The premium is usually expressed as a percentage of the initial loan amount per year, typically between 0.10 % and 0.50 %. On a 200,000 EUR loan at a common rate of 0.34 %, the monthly insurance premium is 200,000 x 0.0034 / 12 = 56.67 EUR, adding 56.67 EUR to the monthly outgoing on top of the 1,159.92 EUR loan repayment.

Since 2010, French law has allowed borrowers to choose their own insurance provider rather than accepting the policy offered by the lender, a right known as delegation d'assurance. Comparing insurance providers can reduce the annual insurance cost significantly, particularly for younger borrowers in good health, since the premium depends heavily on age and health profile.

Fixed rate versus variable rate

The vast majority of French mortgage loans are fixed-rate (taux fixe), meaning the monthly payment never changes over the term. Variable-rate loans (taux variable) exist but are less common; their payment adjusts periodically with a benchmark rate such as Euribor. This calculator covers fixed-rate annuity loans only. For a variable-rate or in-fine structure, consult your lender for a bespoke schedule.