Mortgage Update: Can I release equity in my French home?

 
Mortgage Update: Can I release equity in my French home?

In the current economic climate, many French property owners are keen to maximise the equity they have tied up in their homes, or are looking to restructure expensive loans from 10 years ago. 

A typical scenario we might see is an expatriate (typically British) couple, who have their principal residence in France, perhaps have a modest income, and want to get access to the equity in their home. Alternatively, over the last few weeks we have had several enquiries from overseas residents who have a holiday/secondary home in France, have a project in their own country they want to fund, and want to explore releasing some of the cash from the value of their holiday home.
Equity release is possible in France but it is a very different product to the UK (for example), with very strict rules. It is nowhere near as easy or flexible a product as in other countries.

An application will be subject to some conditions, notably:

  • Released/drawndown funds can only be used for one of two reasons –
    • (i) reinvestment/development of that property, or (ii) purchase/investment of another property.
  • It cannot be used for ‘other’ – weddings, retirement, general living etc
  • Minimum amounts for a lender to be interested usually €200k+ (disinvesting €20k to consolidate some debts won’t be allowed)
  • Income/Affordability rules still apply, so demonstrating to the bank/lender that you have sufficient income to comfortably repay the loan (modest pension income is unlikely to fit the bill)
  • The barrier to entry is often higher for non-French residents.
If you’d like to discuss the possibility of releasing equity from your French property, or remortgaging, do get in touch – [email protected]

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FrenchEntrée's Digital Editor, Zoë is also a freelance journalist who has written for the Telegraph, HuffPost, and CNN, and a guidebook updater for the Rough Guide to France and Rough Guide to Dordogne & Lot. She lives in the French countryside just outside of Nantes, where she writes her blog Râler Like a French Girl, a humorous look at the English-French experience.

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