Women face more obstacles in obtaining mortgages in France

Efma feature

12 March 2020

La Centrale de Financement, a group dedicated to promoting the real estate market in France, published a report showing the gap between men and women in real estate financing.

International Women’s Day was this past Sunday and across the globe, women gathered and demonstrated against the continued inequities they face in the modern world. France was no exception, with thousands of women gathering throughout the country to make their voices heard against the myriad obstacles that remain on the path to full equality.  

A new report published by La Centrale de Financement examines the gaps that exist between men and women when it comes to real estate finance. A tried and true way to build wealth is property acquisition. But as noted in the report, French women face many hurdles in that domain. The report outlined the numerous disadvantages women face in their attempts to obtain credit to buy property.

Some figures help tell the story. French men were granted property loans in 2019 by 6 percentage points more than women. While the average loan for men was 3% more than women, those men that were granted loans had on average 40% less money in the bank. That figure shows the sharp disparity between what banks require from male applicants versus female. Furthermore, the average age of a French man granted a loan was 37 while for women it was 40.

Those are just some of the figures that clearly outline the different realities in the real estate world for French men and women. These disadvantages have harmful long-term effects on the ability of French women to invest and build wealth. The longer they have to wait to acquire property, the longer a primary way to build wealth is delayed.

The mortgage inequities can be trace to another area where women face clear disparities: the income gap. Sylvain Lefevre, the president of the organization, said “With lower incomes, women have lower debt potential than men. This impacts the age at which women borrow, the amount of credit they receive, and the personal amount demanded by the banks. Salary inequalities continue to disadvantage women when they seek a mortgage.”

It is clear that the current situation needs to change. In order to change, it is important to be honest about what these numbers represent: discriminatory lending patterns. Women in France, not to mention all over the world, are discriminated against when it comes to obtaining mortgages. Lenders simply set a much higher bar to clear for women who want to own property. With the gender wage gap, many women are not able to meet the requirements imposed on them by lenders.  

The problem with the current situation, among many, is that lenders are not validated in their practices. Men are not more reliable property debtors. In fact, while the data comes from the U.S., it appears the situation is just the opposite: women are better at paying their mortgages. An Urban Institute report on mortgages from 2016 found that “Holding all credit characteristics constant, female-only borrowers default less than their male counterparts.” The default rate for female-only borrowers for loans that originated from 2004-2007 was 24.6% compared to 25.4% for male-only. For loans that originated from 2008-2010, females borrows again came in with a lower default rate by .1%.

While the differences don’t appear to be too large, what those numbers do show is that there is absolutely no basis for requiring more – income, money in the bank - from women who seek mortgages because they are in fact more reliable borrowers. Banks and lenders need to adjust their lending criteria in France and ensure that women are just as likely as men to receive a loan. As it stands, by imposing more stringent demands on women, it is locking them out of the mortgage industry, a path toward wealth creation, and broader contributions to the economy. Until the discrimination is eradicated, the fight will continue for equality across all domains. 

Keywords : Woman , Corporate social responsibility (CSR) , Mortgage

Geography : France