Salad Days: Understanding a bit about French Mortgages & Loans

In France, to get a mortgage, you may first have to prove you’re not about to die. This is not a metaphor.

Bref.

In France, your mortgage application includes a blood test. A friend took his on January 8th, after weeks of foie gras & champagne. It did not go well.

Health is Wealth

There's a different thinking about debt here. The French don’t seem to think that you should die with any kind of debt. Or at least they will insure against it.

Leave it to the French to take the term “mortgage” quite literally. The term comes from Old French, when mortgage literally meant “dead pledge”, but this doesn’t actually have anything to do with the person living or dying, it more has to do with the fact that the deal dies when the debt is either paid off or when payment fails.

I went out to dinner at a steakhouse with a couple of friends recently. It was six guys at the table and five of us ordered extremely rare stakes, French fries, and beer. Then one guy, Romain, ordered a fruity-looking non-alcoholic cocktail and one of their salads.

I wasn’t the only one to notice. Jean, one of the guys at the table, mentioned it to him.

We’d come for steaks.

Jean: “Alors, pourquoi la salade?” (So why the salad?) “On est venus pour des steaks, non?” (We came for steaks, didn’t we?)

Romain: “C’est à cause de mon assurance.” (It’s because of my insurance.) His mortgage lender had required a blood test. He’d taken it January 8th — the tail end of weeks of foie gras, wine, cheese, repeat. The results were not good. The application was refused.

He was drinking a mocktail. He mentioned this. Then mentioned it again.

Jean shrugged. “Bon appétit. Espérons que ta salade soit aussi satisfaisante que mon steak saignant.” (Here’s hoping your salad is as satisfying as my rare steak.)

Romain picked up his fork — and his mocktail. It was, he wanted us to know, really very refreshing. “Au moins je vivrai assez longtemps pour payer la maison.”

At least I’ll live long enough to pay for the house.

If he can pass the next test.

French future vs. American past

I was the only one with questions.

Wait — back up. You had to get a blood test for a mortgage?

Romain nodded. Standard practice in France for larger loans — life insurance is required above a certain threshold, and to get the life insurance, you have to pass a health checkup.

I thought getting a mortgage in the States was tough.

The others looked mildly confused by my confusion. What did a blood test have to do with getting a loan?

Romain: “Healthy body, healthy finances, I guess.”

Jean: “They don’t want you dying before you pay them back. Not good for anybody.”

Romain stole one of my fries. Again.

limits

The threshold, it turns out, is around €210,000. Above that, French lenders require life insurance tied to the mortgage — which means they need to know you’ll live long enough to pay it back.

Fail the health check, as Romain had, and you’re not just uninsured; you’re kind of ineligible. Fewer banks will touch the loan, and terms get worse. There’s a government-backed framework called AERAS that creates some protections for higher-risk borrowers, but the limits are strict: the mortgage must end before the borrower turns 71, and the loan can’t exceed €320,000.

It’s the inverse of the American system, which looks backward — at your credit history — rather than forward, at your pulse.

Debt in different places

Which perhaps explains something broader. The French carry less personal debt per capita than Americans. Credit cards here aren’t the default they are back home — I’ve paid fees just to maintain one, while in the US the card is free and the fees are buried.

The cultural relationship with debt is different. They don’t seem to believe in leaving it behind.

When the life insurance does come through, it’s not ruinous — roughly 1.4%, charged monthly once the bank accepts the offer. But it’s worth pausing on what you’re actually comparing when you compare French and American mortgages, because the numbers tell an interesting story.

The 30-year fixed rate in the US is around 6.37% (as of this edit). In France, a 20-year fixed loan is averaging closer to 3.23%. The French also tend to borrow less — the average mortgage balance in America is around $252,000, which sounds reasonable until you remember that the median monthly payment for someone who bought in 2023 or 2024 is over $2,000.

The median US household earns around $84,000 a year, before taxes— which sounds comfortable until you take out taxes, and suddenly that $2,000 monthly mortgage payment is closer to 40% of what you take home.

French loans are smaller, fixed for longer, and at a lower rate.

French banks are legally barred from lending you into a payment above 35% of your gross income — a rule that doesn’t exist in the American market, and probably should. That 5% is likely many people’s grocery budget.

Romain was still wary of it all. His wife was furious—reasonably pissed off, he assured us.

Still, when the life insurance does come through, it’s not ruinous — 1.4%, charged monthly.

I was, it once again, the only person at the table who found any of this remarkable.