The mortgage is a real guarantee that the bank takes on a property to secure loan repayment. In the event of borrower default, the bank can seize and sell the property to recover the sums owed. In 2026, the mortgage applies to approximately 20% of property loans in France, with the majority of borrowers opting for a surety bond.
Introduction
When a bank grants a property loan, it requires a guarantee to protect itself against the risk of non-repayment. Two main options are available to the borrower: the conventional mortgage and the surety bond from a specialist organization (Credit Logement, SACCEF). The choice between these two guarantees directly impacts the total cost of the purchase and the loan’s TAEG.
In Paris, where borrowed amounts are often high, between 400,000 and 800,000 euros for a family apartment, the cost difference between a mortgage and a surety bond can represent 3,000 to 5,000 euros. This guide compares both options and helps you choose the guarantee best suited to your project.
Table of contents
- Definition and how the mortgage works
- Conventional mortgage vs IPPD
- Detailed mortgage cost in 2026
- Mortgage versus surety bond: side-by-side comparison
- Mortgage release and impact on resale
- The property hunter’s advice
Definition and how the mortgage works
The mortgage is an accessory right in rem registered against a property in favour of the lender. It is governed by articles 2393 et seq. of the French Civil Code. In practice, it gives the bank a right of pursuit (the right to seize the property even if it has been sold) and a right of priority (the right to be paid before other creditors).
The mortgage registration is carried out by the notaire at the land registry service. It must be renewed if it exceeds the initial loan term. The registration period equals the loan term plus one year.
For a loan of 500,000 euros over 20 years taken out in 2026, the mortgage is registered for a period of 21 years. If the loan is repaid at term, the mortgage lapses automatically one year after the last instalment, without formality or additional cost.
The mortgage does not deprive the owner of the use of their property. They may live in it, rent it out (subject to the loan terms) and even sell it, provided the mortgage is released.
Conventional mortgage vs IPPD
Until 2022, two forms of mortgage guarantee coexisted: the conventional mortgage and the privilege de preteur de deniers (PPD). The PPD, less expensive because it was exempt from land registration tax, was preferred for loans financing the acquisition of an existing property.
Since 1 January 2022, the reform of security law replaced the PPD with the IPPD (Inscription en Privilege du Preteur de Deniers). The IPPD retains the tax advantage: it is exempt from the 0.715% land registration tax, representing a saving of 3,575 euros for a loan of 500,000 euros.
The IPPD can only guarantee the portion of the loan corresponding to the purchase price of the existing property. It does not cover renovations, notaire fees financed by the loan, or new construction. In these cases, the conventional mortgage applies to the uncovered portion.
In Paris, where the vast majority of transactions involve existing properties, the IPPD is applicable in most cases. Your notaire will determine the most appropriate guarantee based on the nature of your financing.
Detailed mortgage cost in 2026
The cost of a conventional mortgage breaks down into several items. For a loan of 500,000 euros in Paris in 2026, the breakdown is as follows.
The land registration tax, at a rate of 0.715% of the loan amount plus 20%, amounts to approximately 4,290 euros. The notaire’s emoluments, calculated on a degressive scale, represent approximately 1,200 to 1,500 euros. The property security contribution (0.05% of the amount) costs approximately 300 euros. Formality fees and disbursements add 400 to 600 euros.
The total cost of the conventional mortgage for a loan of 500,000 euros thus reaches 6,500 to 8,000 euros, or approximately 1.3% to 1.6% of the borrowed amount.
For an IPPD on the same amount, the exemption from land registration tax brings the total cost to approximately 2,500 to 3,500 euros. The saving is significant: 3,000 to 4,500 euros depending on the amounts.
These costs are incorporated into the TAEG calculation and are added to the notaire fees for the transaction itself.
Mortgage versus surety bond: side-by-side comparison
The surety bond is an increasingly used alternative to the mortgage. Credit Logement, the main surety organization in France, guarantees approximately 60% of property loans.
The mechanism is different: instead of registering a guarantee against the property, a third-party organization guarantees the loan repayment. In return, the borrower pays a commission and a contribution to the Fonds Mutuel de Garantie (FMG).
For a loan of 500,000 euros with Credit Logement, the cost in 2026 breaks down as follows. The surety commission amounts to approximately 1,030 euros. The FMG contribution represents approximately 6,250 euros, of which a portion (approximately 4,690 euros) is refundable at the end of the loan. The net cost therefore stands at approximately 2,590 euros.
Comparison for a loan of 500,000 euros: the conventional mortgage costs 6,500 to 8,000 euros (non-refundable), the IPPD costs 2,500 to 3,500 euros (non-refundable), and the Credit Logement surety costs 7,280 euros gross but only 2,590 euros net after FMG refund.
The surety bond has an additional advantage: in the event of resale before the loan term, there are no release costs. The mortgage, on the other hand, requires a paid release.
Not all banks offer the surety option. Certain profiles, rental investors, foreign buyers, SCI structures, are sometimes directed towards the mortgage by default.
Mortgage release and impact on resale
Release is the procedure that lifts the mortgage registration before its natural expiry. It is necessary in two cases: resale of the property before the loan is fully repaid, and early loan repayment followed by refinancing.
The release is a notarial act requiring the bank’s agreement. Its cost, for a loan of 500,000 euros, falls between 1,500 and 3,000 euros in 2026. This amount includes the notaire’s emoluments, the property security contribution and formality fees.
During a resale, the notaire deducts the release costs from the sale proceeds. If the sale price is sufficient to repay the outstanding capital and the release costs, the procedure is transparent for the seller.
In Paris, where the average holding period for an apartment is 7 to 10 years, the probability of needing a release is high. This additional cost must be factored into the overall investment calculation, particularly for a rental investment.
If the loan is repaid in full at term, the mortgage lapses automatically one year after the final instalment, without cost or formality. This one-year period is called the “peremption” of the mortgage registration.
The property hunter’s advice
The choice of bank guarantee is a subject that our property hunters systematically discuss with their clients during the financial structuring phase. This choice impacts the total acquisition cost and the TAEG, and therefore the borrowing capacity.
For a buyer who plans to keep their property for more than 15 years, the mortgage (or IPPD) can be competitive. For a buyer likely to resell within 7 to 10 years, a common profile in Paris, the surety is generally more advantageous thanks to the absence of release costs and the partial FMG refund.
At Home Select, we direct our clients towards the banks and brokers offering the guarantees best suited to their wealth situation. This optimization, combined with negotiation of the purchase price, contributes to reducing the overall cost of the transaction.
For comprehensive guidance on financing your Parisian purchase, see our guide on mortgages in 2026.
FAQ
How much does a mortgage cost for a property purchase in Paris?
The cost of a conventional mortgage for a loan of 500,000 euros in Paris is approximately 6,500 to 8,000 euros in 2026. This amount includes the land registration tax (0.715%), the notaire’s emoluments and formality fees. In the event of resale before the loan is fully repaid, mortgage release costs of 1,500 to 3,000 euros are added.
What is the difference between a mortgage and a Credit Logement surety bond?
The mortgage is a real guarantee registered against the property, managed by the notaire. The surety bond (Credit Logement, SACCEF) is a personal guarantee provided by a third-party organization. The surety is generally cheaper (approximately 1.5% of the borrowed amount versus 2% for the mortgage) and returns part of the contribution at the end of the loan.
Does a mortgage prevent you from reselling your property?
No, the mortgage does not prevent resale. During the sale, the notaire arranges the mortgage release by settling the loan with the sale proceeds. Release costs (1,500 to 3,000 euros) are deducted from the sale proceeds. If the loan is fully repaid, the mortgage lapses automatically one year after the final instalment.
Want to optimize the guarantee on your property loan? Our property hunters support you in choosing the most suitable solution. Contact Home Select for personalized advice.
Frequently asked questions
How much does a mortgage cost for a property purchase in Paris?
The cost of a conventional mortgage for a loan of 500,000 euros in Paris is approximately 6,500 to 8,000 euros in 2026. This amount includes the land registration tax (0.715%), the notaire's emoluments and formality fees. In the event of resale before the loan is fully repaid, mortgage release costs of 1,500 to 3,000 euros are added.
What is the difference between a mortgage and a Credit Logement surety bond?
The mortgage is a real guarantee registered against the property, managed by the notaire. The surety bond (Credit Logement, SACCEF) is a personal guarantee provided by a third-party organization. The surety is generally cheaper (approximately 1.5% of the borrowed amount versus 2% for the mortgage) and returns part of the contribution at the end of the loan.
Does a mortgage prevent you from reselling your property?
No, the mortgage does not prevent resale. During the sale, the notaire arranges the mortgage release by settling the loan with the sale proceeds. Release costs (1,500 to 3,000 euros) are deducted from the sale proceeds. If the loan is fully repaid, the mortgage lapses automatically one year after the final instalment.
