France's zero-interest mortgage, known as the Prêt à Taux Zéro, or PTZ, is a supplementary loan that must be used alongside a conventional mortgage. The average loan size in the fourth quarter of last year was 56,803 euros (about 84.4 million won). For newly built apartments, buyers can borrow up to 50% of the purchase price, or as much as 180,000 euros. Borrowing limits are calculated based on income and region.
The French government sharply expanded the program's scope beginning in April last year. The loans previously covered purchases of newly built apartments in large cities with strong housing demand, but through the end of 2027 they will also cover apartments and detached houses in smaller provincial cities.
That is not all. This year, the government is pushing further expansions, including allowing households with children to use the PTZ a second time.
The National Assembly's finance committee on the 8th approved a budget amendment allowing households with children to use the PTZ again, according to French parliamentary broadcaster LCP on the 23rd.
The government's original bill would have let households expecting a child or with children under the age of 3 use the PTZ one additional time while keeping existing income requirements. The finance committee extended that to households with children under 5 and allowed borrowing of up to 100,000 euros with no income requirement. Under the government's original version, the additional tax credits from expanding support for households with children were estimated at 466 million euros over the next six years.
Volumes have already been rising as the government widened PTZ eligibility nationwide. The number of PTZ loans climbed to 72,906 last year from 44,466 in 2024. This year the figure is estimated to reach 82,900. Tax credits paid out this year total 930 million euros.
Warnings about the fiscal burden are mounting among French politicians. Guillaume Kasbarian, a lawmaker with the Ensemble pour la République bloc, said the PTZ is interest-free for borrowers but not costless for taxpayers, and questioned whether covering the interest of every household in every region out of public finances is the right solution.
Zero-interest lending is widespread in France. One prominent example is the Eco-PTZ, which lends up to 50,000 euros interest-free for home insulation and heating system replacements. That alone illustrates how high demand for welfare support runs in the country.
As a result, France's fiscal health is deteriorating quickly. The International Monetary Fund projects France's debt-to-GDP ratio at 118.5% this year.
Experts say this carries significant implications for South Korea. According to the government's 2026-2030 national fiscal management plan, national debt will swell by 321.3 trillion won, from 1,412.8 trillion won this year to 1,734.1 trillion won in 2030. Spending is rising faster than revenue even as the semiconductor boom continues. Korea's national debt-to-GDP ratio is projected to reach 126.3% by 2055 — roughly where France stands now.
In Korea, debate continues over a "basic finance" proposal that would lend every citizen 10 million won at low interest. Oh Jung-keun, a chair professor at aSSIST University, said zero-interest loans would improve borrowers' access to credit but have likely added to the fiscal strain in France, where the national debt ratio is approaching 120%. "Basic finance is being discussed here as well, and we should treat the French case as a cautionary lesson," the professor said.
Yeom Myung-bae, an honorary professor of economics at Chungnam National University, said cash-based welfare spending in Korea is expanding just as rapidly as in France, leaving little room for growth-oriented spending. "Supporting vulnerable groups is obviously necessary, but for fiscal sustainability we must stick to three principles — that support be temporary, timely and selective," the professor said.