the French government to take a series of measures to help prospective homebuyers secure financing as France’s real estate market struggles with the fallout from high interest rates.

Bloomberg News quoted officials from France’s High Council for Financial Stability as saying that these measures include extending the maximum loan repayment period from 25 years to 27 years, where this extension represents more than 10% of the loan value, in addition to easing the terms of temporary real estate loans.

Allowing Banks Greater Flexibility

At the same time, the new rules will give banks greater flexibility to determine whether mortgage applications do not meet all lending criteria.

While this portion of loans will not exceed 20% of total mortgage loans, this value will be calculated based on a 9-month period rather than the current 3-month period.

Decline in New Mortgage Loans

It is worth noting that new mortgage loans in France have fallen below 10 billion euros ($10.8 billion) per month for the first time since 2015, as consumers struggle with rising interest rates, making them more cautious about borrowing.

French Finance Minister Bruno Le Maire says there may be a problem on the supply side of mortgage lending, which will prompt the Financial Stability Council to explore ways to ease lending conditions.

Last month, Philroy de Gallo, Governor of of the Bank of France said that banks could increase lending because they are not fully utilizing their available facilities under mortgage lending rules; at the same time, regulators are still examining ways to review banks’ decisions to deny mortgage loans.