French Mortgages

French Mortgages
If you intend to buy a holiday home in France or move there permanently then you may need a French Mortgage.

Furthermore if you are already an Expat and wish to buy or remortgage a property in the UK, then the situation becomes even more complex. Very few banks are willing to lend to Expats, however we have contacts that will.

 

French mortgages are similar to UK mortgages in many ways, but the underwriting criteria and terms may vary according to the lender. However, there are good reasons to consider taking out a French mortgage when purchasing a property in France :

* Eurozone interest rates are very low at present, mostly lower than Sterling or Dollar
* Reduce your risk by matching your Euro asset (property) with a Euro liability (mortgage)
* Protect your liquidity by not tying up cash in your property
* Benefit from French consumer protection law by taking out a French mortgage
* Potentially reduce your tax liability by offsetting rental income against interest


With the right lender you can obtain finance for :

* Purchasing a main residence
* Purchasing a second home
* Remortgaging for a better rate or terms
* Renovations
* Buy to Let
* Leaseback
* Bridging loan

What to consider when looking for mortgage finance:

* How much you can borrow
* How much deposit is required
* What is the best interest rate available
* What is the most suitable product for your circumstances
* The documentation required
* The proof of income required
* How to obtain an 'agreement in principle'
* Understanding the mortgage terms and conditions
* Life insurance requirement

 


French Mortgage Products

FIXED RATE MORTGAGES

Fixed rate French mortgages are generally fixed for the term of the mortgage. In general, the lower the loan to value the better the rate. The best rates and terms are usually found at 75% loan to value. However, there is often a repayment penalty for full or part early repayment of the mortgage, throughout the mortgage term.

TRACKER RATE MORTGAGES
Variable rate mortgages are usually based on an index plus a margin added by the bank, thus creating a tracker mortgage for the duration of the loan. The index is generally the 3 or 12 month Euribor rate. With this type of mortgage there is often an additional protection feature in the form of capping an increase to your monthly payment to the rate of inflation.
These mortgages generally don't have an early repayment penalty.

INTEREST ONLY MORTGAGES
More hard to secure as the outstanding capital remains the same throughout the mortgage term. Consequently these are not so popular with many banks.
Maximum loan to value is usually limited to 75%. other guarantees or assets may be required as additional security

COMBINATION MORTGAGES
Some French banks offer a more flexible approach with products that combine Fixed and variable elements. Not so common, but sometimes offer a suitable solution.


For more information on French Mortgages, please contact us or complete the form below :

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