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Mortgages in France

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Mortgages in France

France offers a wide variety of financial products for overseas buyers recent trends indicate that many UK buyers now opt to finance their French property purchase by using local lenders. The combimation of UK higher interest rates and the complications of paying a mortgage in Euros whilst earning in GBP sterling is a factor in deciding which way to finance your purchase.

 
Property in France and French mortgages do not have to be complicated
 

Currency brokers can save you money  

Currency brokers can book good exchange rates for long periods in advance therefore protecting the French home buyer from the uncertainty of the currency markets. Exchange rates change constantly and 10% fluctuations in a relatively short space of time are not uncommon. This could effectively increase, by 10% or more, the sterling amount that you will have to pay .There are various organisations that can convert your sterling into whichever currency you need. Specialist currency dealers will normally offer you a better rate of exchange than your bank and provide a more personalised service. Foreign exchange companies like Moneycorp often offer a proactive service to their clients, using their expertise to monitor exchange rates on the clients' behalf in order to achieve the best possible rate of exchange.

 

 Learn more Transferring money to France

 

  

Buying property in France

A wonderful quality of life, efficient transport links and some of the most spectacular scenery in Europe – just three of the reasons why France continues to be one of the most popular destinations for Britain’s growing army of overseas property buyers. Britons accounted for almost 50 per cent of all sales of French property to foreigners in 2004, and with at least 51,000 Britons currently owning property in the country, this is a cross-channel love affair that shows no sign of ending.

Lending is based on affordability and does NOT allow for rental income from the property.  The information required by the bank aims at defining your actual income and thus your ability to repay the mortgage. Loans are granted as long as the payments do not increase your debts unreasonably.  As a rule expenditure should not exceed one third of your gross income.

Types of French Mortgages

 Repayment & Interest only

Minimum loan amount – €32,000 No Maximum, but must not exceed 85% of valuation or purchase price (whichever is the lower)

Proof of Income: Required in all cases. Mortgages need to be supported by a minimum requirement of proof of income, i.e. if employed – copies of your last six month’s payslips & copies of your latest two P60’s together with copies of your last 6 month’s Personal Bank Statements.  Alternatively if you are self-employed – copies of your last three years Audited Accounts & copies of both your last 12 month’s Business and last 6 month’s Personal Bank Statements will be required on application. Non-Status loans are currently not available.

Term: 5-25 years up to age 70

Currency: Euros only

Current Variable Interest Rate: from approx 3.5%

Example for French Mortgage: Repayment mortgage of approx€ 100,000 over a period of 25 years at an interest rate of approx. 3.5% = approx €500 capital and interest per month = a total approximate amount payable over the term of €150,000  excluding other fees.

French mortgage quote

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Mortgages in France

 

Max 85% LTV

Term 5-25 years

Minimum loan €32,000

Euros only

Repayment & Interest Only

Max age 70

Rates from approx 3.50%

 
 

Before you enter into any property purchase you should consider the following things:-

Appoint a good lawyer who can carry you through the process till completion

Only buy what you can afford. Do not overlook Foreign Currency Fluctuations and all closing costs.

Make sure you have a good Idea of what mortgage you will be able to secure prior to entering into any contract to buy

Remember that when taking out an overseas mortgage you will have to declare full details and your assessment will be made on the affordability to pay and not income alone

French property resources

 

 

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