The **French Banking Federation** (FBF), which represents 317 banks, is asking the government to remove rules introduced by the **High Council for Financial Stability** (HCSF) that have regulated mortgage lending since 2013. This request comes as interest rates have risen, causing growing tensions in the French housing market. The FBF believes that the current regulations are no longer appropriate for the economic climate and are hindering the ability of banks to offer mortgages to more people. Since 2022, the HCSF has imposed two main restrictions on French banks: a maximum ratio of 35% between housing costs and a borrower's income, and a maximum loan term of 25 years unless at least 10% of the loan is used for home improvements. These rules were introduced to prevent households from becoming over-indebted, a problem that contributed to the 2008-2011 financial crisis. The FBF says that relaxing these rules would allow banks to offer more mortgages, especially to those with higher or growing incomes. Since August 2026, the mortgage market has faced challenges due to rising interest rates. For 20-year loans, rates reached 3.6% in September 2026, and for 25-year loans, they were 3.7%. Some lenders are now offering rates close to 4%. As a result, the average loan term has increased to over 22 years. The existing rules make it harder for financially stable households to get loans, even if they can afford higher debt levels. Removing the HCSF's rules could allow banks to approve many more loans. While estimates vary, it is believed that tens of billions of euros in previously denied loans could be approved each year. This would help banks reach more customers, including low-income individuals and property investors. The **Federation of Real Estate Developers** (FPI) supports this move, arguing that it could boost demand for both new and existing homes. This, in turn, could lead to a revival in residential construction, which employs hundreds of thousands of people in France. The impact of this change would not be limited to construction. The real estate sector drives activity in areas like furniture, home appliances, and renovation services. Economists estimate that each euro invested in residential construction generates between 1.5 and 2 euros in added value. This could lead to more jobs and increased consumer spending, helping to support economic growth through domestic demand. However, regulators are cautious. The HCSF was established to prevent the mistakes that led to the 2008 financial crisis, and current rules are meant to ensure that credit remains stable even if the economy worsens. They aim to stop excessive lending that could lead to another financial crisis. The FBF argues that banks are already capable of managing risk without strict rules, but history shows that individual banks may take more risks during periods of economic growth. This has led to a debate between those who favor bank discretion and those who support government oversight to ensure stability.