Banks to tighten rules on getting a mortgage in France

Getting a mortgage in France, whether for a main residence or a second home, could get more difficult from January as banks tighten compliance on new rules for lending.

France’s financial watchdog, the Haut Conseil de stabilité financière (HCSF), earlier this year introduced two new recommendations to cut back increasingly long mortgage periods and overly generous lending options.

It meant banks were recommended not to grant mortgages of over 25 years, although in some cases exemptions could be granted. They were also told to limit the amount most buyers were allowed to pay back as part of a mortgage scheme to 35% of the buyer’s net income.

From January 1, 2022, banks will face sanctions for non-compliance with these two rules. However, they will be allowed to deviate from these criteria for 20% of loans they grant.

Currently, 20.9% of loans granted by the major banking networks are not compliant, so lending conditions are not expected to change drastically in 2022.

However, Maël Bernier, spokesperson for price comparison site Meilleurtaux, said the new rules could affect the less well-off.

"This will undoubtedly lead to a much more complicated access to property for young buyers, who are less wealthy and do not have savings to complete their purchase," she told economic and business magazine Capital.

In 2020, €192.7billion of mortgages, excluding buybacks and renegotiations, were granted, almost as much as the 2019 record of €193 billion.