France: Rules relaxed for 27-year mortgage scheme

Following pressure from financial institutions, banks and mortgage lenders, France’s High Council for Financial Stability (HCSF) has announced a significant change to the rules for prospective homeowners hoping to secure a 27-year mortgage. 

It was announced in mid-December that the government would be downgrading the requirements needed to obtain a 27-year mortgage, which are relatively rare in France. 

Until the changes were unveiled, those with a 27-year mortgage had to pledge to spend 25% of the total loan on home improvements and repairs. This has now been revised down to 10% of the overall amount borrowed.  

The type of improvements covered include modernisation works, the installation of energy-saving and efficiency features, and essential repairs.  

The announcement was joined by a statement that bridging loans will continued to be excluded from the total monthly income-debt ratio of 27-year mortgage applicants, which is currently set at a recommended 35% by the HCSF, as long as they “do not represent more than 80% of the value of the sale”.  

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