Mortgage lending: a report praises the "robustness" of the current French model

The CCSF, a French public body where financial institutions and clients, parliamentarians and trade unions sit in equal numbers, was approached in 2024 by Bruno Le Maire, then Minister of the Economy, to find ways to unblock the mortgage market, which was struggling.

Bruno Le Maire had asked the Committee to undertake "a reflection on the French model of financing the acquisition of housing, by establishing a comparison with neighboring countries", where mortgage credit is mainly practiced at variable rates which fluctuate up and down during the term of the loan, and to study, among other things, "the advantages and risks of a transferability or portability of mortgage loans".

In the recommendation accompanying its report, the CCSF emphasizes that its members "affirm their unanimous commitment to the French model of financing the acquisition of the main residence, in its main characteristics, shared with other countries but unique in their combination".

This system "has demonstrated its robustness, with the rate of default on loan repayments remaining very low for decades, especially compared to what it may be in other nearby countries," he adds.

CCSF members are particularly critical of portability, which allows a borrower to retain the conditions of their initial loan when purchasing a new property after the sale of the first, and transferability (a variant in which the loan is transferred to the new owner of the property).

The CCSF believes that these mechanisms "do not constitute viable solutions for improving access to credit to finance primary residences." It adds that their widespread adoption would "complicate" credit management.

These two solutions had been put forward in 2024 by the National Federation of Real Estate (Fnaim) to revive the market, but the banks had been wary.

The CCSF also expressed reservations about bullet loans, where the capital is repaid in a single lump sum at the loan's maturity.

This type of loan "is not a generalizable solution for homeownership", he concludes, since it "presents (...) a higher cost and risk for households".

Illustrative image of the article via Depositphotos.com.