A quiet revolution is going on in the French banking system. The mortgage loans in the last 5-6 years have been consistently made longer and longer. There are already talks about possible 50-year mortgage loans in not so distant future. This revolution started on the other side of the Atlantic. With banking system as developed as in French, and a real estate market that takes only the sky as a limit, France had to adapt its financial services to the new realities. With a banking system so intermingled with other European countries, it's a matter of time before similar 'revolutions' occur in other countries of the continent.

France was traditionally a country where real estate transactions didn't require large banking loans. For decades it was assumed that for those with modest incomes it was the government that should care about housing; for everybody else, it was assumed that they had enough savings in order to pay in advance at least a big portion of their new property. What remained was partially financed by bank loans, taking as collateral already existing properties of the buyers. This system was, honestly speaking, burdensome for the clients. The mortgage loans were not a tool considered as appropriate for everybody. In addition, buying property in the cities, think about some downtown areas in Paris, was considered as a sign of membership for certain affluent social classes. Up to until very recently, for some until now, it's the government that had to solve all housing problems for working classes, a concept that makes private bank system simply unnecessary.

Several main events made this old system obsolete and in need of fixing. The first was the dire realization that the government isn't capable of providing anyone with decent housing; no mater how strong does it try to perform this job. Second, the residential real estate market in several cities, beginning with Paris, is so high that it makes almost impossible even for the upper classes to buy something using the old banking products. Third, the French banking system itself is in much better shape, and is able to provide better services at lower costs for the customers. Fourth, French citizens, like other westerners, live much longer than in the past. So, they are able now to pay back their loans for much longer.

So, the revolution went on. Only 5 years ago, it was the 15-year mortgage loan that was a norm. According to French mortgage analysts, it went from almost 40 percent of all loans in 2002 to slightly more than 10 percent now. In 2006, it's the 25-year mortgage loan that is most in favor among the French buyers. By switching from 15- to 25-year loans, buyers can afford, with the same annual incomes, and the same annul service payments, to borrow almost one third more. This move was so popular that several French banks were already offering 30-year loans by the end of 2006. In the beginning of 2008, at the latest, some banks will start offering 40-year loans. Offering 50-year loans, that will allow buyers to borrow by 20 percent more than for 30-year loans, without increasing their monthly payments, is already under consideration. The mortgage 'revolution' has already happened in France. It's a matter of time before it reaches all corners of Europe.

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See also the directory of companies providing real estate services in, and general real estate information of France.