An Introduction To French Mortgages

France is an ever-popular destination for buyers. It is not hard to see why – from Paris to the Alps, the country provides a diverse range of properties and its 13 regions each boast their own unique appeal. France has a contrasting climate and rich cultural heritage. Lovers of the good life are spoilt for choice: with its artistic cities, sleepy villages, lush countryside, enchanting coastline, celebrated cuisine and fine wines.

 

Your Options

Most people will purchase a permanent or second home in France with a mortgage. There are two main mortgage options: remortgaging with your existing lender or obtain a mortgage in France through French banks or French mortgage brokers. Both of these options will have advantages, but you should always obtain professional advice from a qualified mortgage adviser to review your own situation.

With a number of mortgage products on both the French and overseas markets, choosing the right one for your financial and personal circumstances is an important decision. We have curated a list of the 5 most popular mortgage options in France which you can find here. Over the past few years, French lenders have all increased their minimum loan amount to €100’000 and very few will be able to lend less than that amount.

At FrenchEntrée we can help you find your dream property and the right mortgage deal for you. Before proceeding with your property search, why not contact one of our mortgage consultants so that you can continue your search with the confidence of knowing exactly how much you can afford. You can contact our team here.

Euro or Sterling Mortgage?

If you live in the UK and your earnings and savings are in sterling, it is important that you are aware of the current currency exchange rate when buying a property in France. If in the future you decided to sell the house and convert the proceeds back into UK pounds, at that moment in time the financial return you see will depend not just on the French housing market in your chosen region but also on the exchange rate at the point of sale. This could work in your favour, but it is important to remember that there is a risk of the currency rate working against you and any gain on the property value might be lost on the exchange rate. Equally if the exchange rate is positive it might offset any property losses. When deciding where to borrow, you should consider such currency implications.

Interest Rates

Interest rates in France have always been desirable due to their low amounts and the long term they can be fixed over. We always recommend speaking to our one of our mortgage consultants about what rates you could get if considering your mortgage options.

When acquiring a mortgage, it is also important to be aware of the additional costs. You will need cash for the deposit (usually 15-20% or more) and some extra cash for the notaire fees which you cannot add to your loan. They are usually 7-8% of the property purchase price. If you aged 57 or above, please note you will also need French life insurance, you can visit our insurance zone here.

Here at FrenchEntrée we have an experienced team of property and mortgage specialists who are able to assist you through the whole process from finding your perfect French home to buying your property with the right mortgage deal for your situation and circumstances. Our mortgage consultants can provide you with an independent assessment of your funding requirements: euro or sterling mortgages.