French households have less debt

Compared to other EU neighbours French households remain relatively low debt. According to the Bank of France, French debt was 84.7% of gross disposable income at the end of September 2014, a level equivalent to that in force a year earlier (84.6%).

According to a study by the consulting firm McKinsey, debt of French households has increased by 15 points since 2007 largely due to the rise of real estate prices. Nevertheless, the French remain among the least indebted households from rich countries, with the Germans (82.7% of income) and also the Italians (62%).

Conversely, at the end of September 2014, the Americans were still indebted to the tune of 136.5% of their income, the English 134.5% and Spanish 111.8%. And although they have made big debt reduction efforts since the crisis of 2008 in other countries, such as Denmark and the Netherlands where households continued to accumulate credits, the situation is even worse, with a debt ratio to 269% in the former and 230% in the later.

A good thing for France under the eye of ratings agencies

So as well as being wise, French households have a high savings rate (15.8%), and these two factors combined are part of the reasons why France hasn’t had her sovereign rating downgraded by the rating agencies.

France is rated AA by Standard & Poor’s (the third best score after AAA and AA +), AA1 by Moody’s (second grade) and AA by Fitch (third grade). Where the agencies all seem to agree is that with money matters, France and the French always plan long term making it the level of public debt less problematic.

French mortgages are a core part of this, with long term fixed rates offering long term fixed security.