Interest Rate for New French Housing Savings Plans to Drop to 1.75% in 2025

The rate cut marks the first reduction since 2016, raising questions about the product's competitiveness and role in housing finance.

The interest rate for new Plans d’Épargne Logement (PEL) accounts will decrease from 2.25% to 1.75% starting January 1, 2025, as announced in the Journal Officiel.
This is the first rate reduction since 2016, following two consecutive increases in 2023 and 2024, when rates reached 2% and 2.25%, respectively.
The PEL, a government-regulated savings product designed to support homeownership, now offers significantly lower returns compared to other savings options like the Livret A (3%) or Livret d’épargne populaire (4%).
Experts suggest the PEL remains unattractive for general savings but could still benefit individuals planning a property purchase, as it guarantees a fixed borrowing rate for housing loans.
Total PEL savings have dropped to €224 billion as of October 2024, the lowest level since 2015, prompting calls for a reform to better align the product with modern housing finance needs.