Mortgages in France

WHY DO YOU NEED TO ARRANGE FOR A MORTGAGE IN FRANCE

French interest rates are currently very low relatively and it appears that rates are set to stay that way for the near to medium term. Accordingly it has never been more attractive to acquire a loan to finance your property purchase. In France it is also possible to lock in Fixed rates from day one for the duration of the loan so you know that the rate is fixed long term. Variable rates are currently very competitive and offer the possibilities of early repayment usually without penalties.
When purchasing a property in euros, it is recommended to have a loan against that property in euros to avoid potential risks of fluctuation in currency values against the property.

MORTGAGE TYPES

There are a variety of different mortgages that we specialise in and can help you with obtaining, the different types these are listed below:
Main home Mortgages – if you are moving or already living here in France we can help you get the best conditions.
Second/ Holiday Home Mortgages – for people looking to own a property here in the south of France
Investment Property – If you are looking to buy a property here to rent out ie Buy to let
Refinancing your Existing Mortgage – If you already own a property and have a mortgage, it maybe interesting to look at refinancing the mortgage because interest rates are very low at the moment and you could save a lot of money long term with a new lower interest rate.
NB – Each banks criteria differs depending on your personal situation and the object of the mortgage so in order to have accurate information regarding your loan and your requirements please contact us.

FRENCH MORTGAGE PRODUCTS AND INTEREST RATES

CAPITAL REPAYMENT MORTGAGES

In France this is the main type of loan offered, where you are repaying the capital and interest from day one. These loans are generally offered with Variable Interest rates, Fixed rates or Capped rates. Each of these rates has there advantages and disadvantages based on your aims and requirements.

INTEREST ONLY MORTGAGES

This loan is offered in France, but is required to be linked to some kind of investment, the aim of the investment is to acquire interest and serve to repay the outstanding capital at the term of the loan. Because you are only paying back interest and not capital, the monthly payments are considerably lower. The amount of the investment differs from bank to bank but also on the size of the loan. NB – When you are only paying interest, at the term of the loan you still owe the capital amount. Please contact us for more information regarding these types of loans.

INTEREST RATES

Variable rates – are usually based on Libor 3 months or 12 months plus the banks margin. The rates are variable so they change, either on a 3 month basis or 12 month basis, either affecting your duration or monthly payments. The advantages of a variable rate is there are usually no penalties for early repayment partial or total.
Fixed rates – are very interesting at the moment, as you can block a rate now for the duration of the loan, ie 15 years or 20 years, so you always know how much your loan is going to cost for the whole term of the loan. However, with fixed rates there are usually penalties for early repayments partial or total, which are around 3% of the capital sum outstanding which can not be more than six months interest.
Capped rates – are interesting because the variable rates are very low at the moment, they are often based on a variable rate then with a cap of plus 1, 2 or 3% so your rate can never go above a certain rate. However, capped rates can sometimes have penalties for early repayments.