Since 1 August 2026, the Livret A (France's tax-free regulated savings account) has paid 1.70%. In the same month, the average rate on new French home loans reached 3.32%, up 0.24 points since the start of the year according to the Banque de France. If you are preparing a first purchase, one question arises. Should you save for one more year to arrive with a bigger deposit? Or borrow now, before credit becomes dearer still?
The two rates do not carry the same weight. One applies to your savings, a few tens of thousands of euros; the other to your loan, often five or six times more. And the PEL (plan d'épargne logement, a French home-savings plan) is usually presented as the best-paying product for a home purchase. Once tax has been paid, it actually pays less than the Livret A.
On a €183,000 loan, a 0.22-point rise in the rate wipes out €4,110 of borrowing capacity. One year of Livret A interest on a €34,000 deposit brings in €578. These are the average amounts borrowed and put down by first-time buyers in July 2026, and the rate rise observed between August 2025 and August 2026.
What this article covers
What the Livret A, the LDDS and the PEL really pay in 2026, net of income tax and social charges. Why a PEL opened for a purchase planned within a year is the worst of the three choices. How much each tenth of a point of rate rise costs in euros of borrowing capacity. And the monthly saving that makes waiting a neutral choice.
Livret A, LDDS, PEL: the legal framework for saving a home deposit in France in 2026
Livret A and LDDS: 1.70% until 31 January 2027, barring an early revision
The reference text is the arrêté (ministerial order) of 28 July 2026 on the interest rates of certain regulated savings products. It applies "for the period from 1 August 2026 to 31 January 2027, without prejudice to the provisions set out in 3° of II of article 1 of the aforementioned arrêté of 27 January 2021". It sets at 1.70% the rate of the Livret A and of the LDDS (livret de développement durable et solidaire, a second tax-free savings account) (art. 1, 1°). It also sets at 1.25% the rate of the CEL (compte d'épargne logement, home-savings account) (art. 1, 4°). That last figure will matter further on.
Livret A interest is not included in taxable income (code général des impôts, the French General Tax Code or CGI, art. 157, 7°). Nor is LDDS interest (art. 157, 9° quater). Both are also exempt from social charges, according to the official service-public.gouv.fr guidance. The deposit ceiling is €22,950 for the Livret A and €12,000 for the LDDS. Each person may hold only one Livret A and one LDDS. A married couple can therefore place up to €69,900 at 1.70% tax-free. So can a couple registered under a PACS (pacte civil de solidarité, the French civil partnership). Interest accrues by fortnight and is added to the capital on 31 December.
PEL: 2% gross, a 3.20% loan, no more state bonus
A notice published in the Journal officiel (JO, the French official gazette) of 20 December 2025 sets the rate paid on PELs opened from 1 January 2026 at 2.00%. That rate stays with the plan for its whole life. The rest comes from service-public.gouv.fr (PEL page checked on 9 October 2026). At term, a plan opened since that date gives a right to a home-savings loan at 3.20%. That loan is capped at €92,000. Deposits are capped at €61,200. Plans opened since 2018 no longer receive the state bonus.
The plan is taken out for at least four years from the initial deposit (code de la construction et de l'habitation, the French Construction and Housing Code or CCH, art. R. 315-28). Terminating it less than two years after the first deposit has a cost. The interest is then recalculated "by applying to all of the deposits the rate in force for home-savings accounts at the date of termination" (art. R. 315-32, a).
How a PEL opened since 2018 is taxed
The income tax exemption on PEL interest applies only "to home-savings plans opened up to 31 December 2017" (CGI, art. 157, 9° bis). For a plan opened since then, interest is taxed every year under the 12.8% flat-rate levy (CGI, art. 200 A), unless the household opts globally for the progressive scale.
Then come social charges. The 2026 social security financing act raised them (loi n° 2025-1403 of 30 December 2025, art. 12). The rate of the CSG (contribution sociale généralisée, the main social charge) on investment income rose from 9.2% to 10.6% (code de la sécurité sociale, the French Social Security Code or CSS, art. L. 136-8, I, 2°). That gives 18.6% of social charges in total. Paragraph IV of the same article keeps the CSG at 9.2% for home savings. But on a literal reading it covers only the interest of PELs "exempt from income tax under 9° bis of article 157" (art. L. 136-7, II, 2°). Those are plans opened before 2018.
The administration settled the point. The BOSS (Bulletin officiel de la sécurité sociale, the official social security guidance) has published questions and answers on the CSG on capital income. In that guidance, the BOSS extends the 9.2% rate to PELs and CELs opened since 1 January 2018. It cites the legislator's intent and equal treatment of taxpayers. Social charges on a PEL opened in 2026 are therefore 17.2%, and the total levy 30%.
| Product | Gross rate | Income tax and social charges | Reference |
|---|---|---|---|
| Livret A, LDDS | 1.70% until 31 January 2027, barring an early revision | None | Arrêté of 28 July 2026; CGI, art. 157, 7° (Livret A) and 9° quater (LDDS) |
| PEL opened since 1 January 2026 | 2.00% for the whole life of the plan | 12.8% + 17.2% = 30%, every year | Notice in the JO of 20 December 2025; CGI, art. 200 A; BOSS |
| PEL terminated within two years | CEL rate at termination (1.25% today) | 30% | CCH, art. R. 315-32, a |
Why the PEL pays less than the Livret A in 2026
The net calculation, product by product
On a PEL opened in 2026, 2.00% gross less 30% of levies leaves 1.40% net. The Livret A pays 1.70% with no levy at all. The gap therefore favours the savings account by 0.30 points, while the headline rate suggests the opposite.
Opting for the progressive scale does not reverse the ranking. A non-taxpaying household that opts out of the flat rate no longer pays the 12.8% income tax. It still bears the 17.2% social charges: its PEL pays 1.66% net, still below the Livret A. The option is, moreover, global: it applies to all the household's investment income for the year (CGI, art. 200 A, 2).
| €34,000 placed for one year | Calculation | Net interest |
|---|---|---|
| Livret A (two accounts for a couple) | 34,000 × 1.70% | €578 |
| PEL kept at least two years, non-taxpaying household on the scale | 34,000 × 2.00% × (1 − 17.2%) | €563 |
| PEL kept at least two years, flat-rate levy | 34,000 × 2.00% × (1 − 30%) | €476 |
| PEL closed after one year (current CEL rate) | 34,000 × 1.25% × (1 − 30%) | €297.50 |
The short-horizon trap
The last line is the one that matters for a purchase planned within the year. Closed before its second anniversary, the PEL loses its contractual rate. All deposits are then paid at the CEL rate in force on the date of termination (CCH, art. R. 315-32, a). That rate is 1.25% until 31 January 2027, barring an early revision; the rate that will apply to a closure in a year's time (autumn 2027) is not yet known. Closed that early, the plan gives no right to a home-savings loan either (service-public.gouv.fr).
The savings account's lead is not guaranteed over time. The PEL keeps its 2% rate for the whole life of the plan. The Livret A rate is recalculated twice a year, on 15 January and 15 July. This is laid down by the arrêté of 27 January 2021 on the interest rates of regulated savings products (art. 1, II, 1°). An early revision remains possible on 1 May or 1 November if the Banque de France considers it justified (same article, II, 3°); the next window opens on 15 October 2026. An upward revision would only widen the gap with the PEL, which stays at 1.40% net. For a plan kept at least two years, the PEL moves back ahead if the Livret A falls below about 1.40% on average.
The 3.20% home-savings loan
That leaves the loan argument. The loan attached to a PEL opened in 2026 will carry 3.20%, against a 3.32% average market rate in August 2026. The gap is 0.12 points, on €92,000 at most. And that loan does not come before three years of saving. According to service-public.gouv.fr, the maximum amount is available only after four years. Its amount depends on the interest earned on the plan; it is not a right to the ceiling.
The real advantage lies elsewhere: in the PELs you already hold. A plan opened between 1 January 2018 and 31 December 2022 gives a right to a loan at 2.20%, more than a point below the market. Before closing an old PEL to top up your deposit, ask your bank how much it would lend you on it.
Real returns, and the inflation that matters for a deposit
Measured against inflation, all these products lose purchasing power. INSEE (the French national statistics institute) estimates consumer price inflation at 3.0% year on year in September 2026 (provisional estimate of 30 September). The Livret A therefore returns about −1.3% in real terms, the PEL about −1.6%.
For a deposit, the price rise that counts is that of the home you are aiming for. Year on year, prices of existing homes fell by 0.8% in the second quarter of 2026 according to the Notaires-INSEE index (provisional). Over that period, a deposit held in a Livret A gained ground on prices. That measurement describes the past twelve months; it says nothing about the next twelve.
The race against rates: what a year's wait costs in borrowing capacity
The Banque de France measures the average rate on new home loans, excluding renegotiations and excluding fees and insurance. It stood at 3.10% in August 2025, then 3.30% in July 2026. It reached 3.32% in August 2026 (provisional figure published on 6 October 2026). That is an increase of 0.22 points in a year.
That rise becomes a loss because of the rule of the HCSF (Haut Conseil de stabilité financière, France's macroprudential authority). The borrower's debt-service ratio does not exceed 35% and the loan term does not exceed 25 years (decision no. D-HCSF-2021-7 of 29 September 2021, art. 1). A deferred-repayment period is tolerated up to 27 years in some cases, such as off-plan purchases or new builds (same article). Apart from that deferral, the only leeway is each bank's flexibility margin of 20% of its quarterly lending (art. 2). With unchanged income, the maximum monthly payment does not move. When the rate rises, that same payment repays less capital, and the amount you can borrow falls.
Take a first-time buyer's average loan in July 2026. It was about €183,000 over 23 years and 10 months, or 286 months (Banque de France, Panorama of household home loans). At the August 2026 rate, the monthly payment is €927, insurance aside. Here is what that payment allows you to borrow at different rates.
| Loan rate | Capital that €926.89 a month over 286 months repays | Difference from August 2026 |
|---|---|---|
| 3.12% (−0.20 points) | €186,855 | +€3,855 |
| 3.32% (August 2026) | €183,000 | — |
| 3.42% (+0.10 points) | €181,115 | −€1,885 |
| 3.54% (+0.22 points, the rise of the past twelve months) | €178,890 | −€4,110 |
| 3.72% (+0.40 points) | €175,625 | −€7,375 |
The rule of thumb: over this term and at this level of rates, each tenth of a point costs slightly more than 1% of the capital you can borrow. The table reads both ways: a 0.20-point fall would give back €3,855. It does not forecast rates; it puts a figure on their consequences.
The choice of savings product is worth a few hundred euros, the path of rates a few thousand. Between a Livret A and a PEL closed after one year, the difference in interest on €34,000 is €280.50. A 0.22-point rise costs €4,110 of borrowing capacity.
Case study: save for one more year or borrow now
Profile: a couple in a PACS (French civil partnership) is buying for the first time. They have built a €34,000 deposit on their two Livret A accounts. Their income supports a monthly payment of €927 excluding insurance. At the August 2026 rate, they can borrow €183,000 over 286 months, the average amounts the Banque de France observes for first-time buyers.
You are tempted to wait twelve months to arrive with a more comfortable deposit. Suppose rates rise by another 0.22 points, as they did over the past twelve months. How much must you save each month for your purchase budget not to shrink?
Scenario — wait one year, rates up 0.22 points
| Item | Detail | Amount |
|---|---|---|
| Borrowing capacity today | €927 a month at 3.32% over 286 months | €183,000 |
| Borrowing capacity in a year | Same payment at 3.54% | €178,890 |
| Loss of capacity | 178,890 − 183,000 | −€4,110 |
| Interest on the existing deposit | €34,000 at 1.70%, tax-free | +€578 |
| Left to cover from new savings | 4,110 − 578 | €3,532 |
| Break-even monthly saving | €3,532 ÷ 12.1 (twelve deposits and their interest) | ≈ €292 a month |
With income, loan term and price unchanged, and if rates rise by another 0.22 points, the threshold is €292 of new savings a month. Below it, your purchase budget shrinks; above it, it grows. If rates stay flat, every euro saved adds to the budget.
The calculation assumes the Livret A stays at 1.70% all year. Yet the arrêté guarantees that rate only until 31 January 2027, barring an early revision. On €34,000, a different rate changes the result by a few tens to about a hundred and fifty euros. Take the twelve months from October 2026 to September 2027. A rate of 1.50% from 1 February 2027 would take away €45. A rate of 1.00% would take away €159.
Two levers shift that threshold. If your income rises by 2% during the year of waiting, the admissible payment becomes €945.43. The loss of capacity at 3.54% then shrinks to €532 (€182,468 borrowable). The other lever is to extend the loan to 300 months, the 25-year ceiling. The same €926.89 payment then lets you borrow €184,356 at 3.54%, more than today. The price is a longer and dearer loan.
Two items are missing from this balance. The first, the extra year of rent, counts against waiting. Our analysis of the break-even point between buying and renting in 2026 works it out city by city, with the opportunity cost of the deposit. The second, the price of the property, may move either way during those twelve months.
That leaves the size of the deposit itself. In practice, banks expect enough to cover the purchase costs, but no text sets a minimum. That is the subject of our article on the salary needed to borrow €200,000 to €300,000, which we do not repeat here.
4 costly mistakes when building a home deposit
Mistake no. 1 — Opening a PEL for a purchase planned within a year
This is when the PEL pays least: remunerated at the home-savings account rate, taxed at 30%, with no right to a loan. On €34,000 you lose €280.50 compared with the Livret A. And your money is not available as freely as on a savings account.
Mistake no. 2 — Comparing gross rates
Two per cent against 1.70%: the headline comparison misleads, because it ignores 30% of levies on one side and none on the other. Always compare net rates, at your household's actual tax position.
Mistake no. 3 — Believing that waiting "earns" interest
A year's interest on €34,000 barely covers 0.03 points of rate rise. What makes the budget grow while you wait is the amount you put aside each month, not the return of the product.
⚠️ Warning: do not rush to close a PEL opened between 2018 and 2022. First ask your bank how much you could borrow at 2.20% on it. Loan rights are kept for one year after a withdrawal made after the fourth year, according to service-public.gouv.fr.
Mistake no. 4 — Taking the Livret A rate for granted
The 1.70% rate applies from 1 August 2026 to 31 January 2027, barring an early revision. No text says what the next one will be. A savings plan calculated with an older rate, or extended beyond that date without saying so, is wrong. Redo your calculation each time a new arrêté is published.
Home deposit savings-effort calculator
Enter your deposit target, your starting savings and what you can put aside each month. The calculator gives the number of months needed to reach the target. Its comparator ranks the products by their net interest (Livret A, LDDS, PEL, life insurance). The other way round, it gives the monthly saving that a fixed purchase date requires.
To go further: the borrowing capacity calculator, to measure what a change in rates does to your budget.
Conclusion
In 2026, the Livret A pays more than the PEL once levies are paid, and a PEL closed within two years pays less still. But the gap between products is counted in hundreds of euros. A rate rise similar to that of the past twelve months removes more than €4,000 of borrowing capacity from an average first-time buyer's loan. If rates rise by another 0.22 points, waiting a year is neutral only if you save at least €292 more each month. That threshold holds with income, loan term and price unchanged.
Mon Simulateur Immobilier's savings-effort calculator gives you the monthly saving that your deposit target and your purchase horizon require. The borrowing capacity calculator measures the effect of a change in rates.
