Releasing Equity from a French Property after 60: How it Works

For many British and other international owners who have made France their home, retirement can bring an awkward dilemma. The property they bought decades ago has often risen substantially in value, while pensions and other income have not always kept pace. A large share of their wealth is locked in the house itself, and the obvious solutions, selling up or taking out a conventional loan in their seventies, are rarely appealing or even available to people no longer in employment.

There is a third route that tends to be less well known among English-speaking residents: the prêt viager hypothécaire, France’s regulated form of equity release. It was created by the Ordonnance of 23 March 2006 reforming French security law, sits within the Code de la consommation, and is offered by a small number of lenders authorised by the Autorité de Contrôle Prudentiel et de Résolution (ACPR). It allows older owners to borrow against their home without making monthly repayments, and without ever leaving heirs with a debt larger than the property is worth.

How the loan works

The borrower receives a lump sum based on the value of their home. Depending on the lender and the property, that figure typically falls somewhere between €50,000 and €500,000. The advance is normally capped at around 30 per cent of the appraised value, and the precise percentage depends on the borrower’s age: the older the borrower, the higher the proportion that can be released.

Interest is added to the loan rather than paid each month, so the balance grows over time. The capital and accumulated interest are only repayable when the property is sold or when the borrower passes away, at which point the estate settles the loan from the proceeds. There is also a variant in which the borrower chooses to pay the interest monthly, leaving only the original capital outstanding, but the headline product taken up by most over-60s is the fully deferred version.

Because interest compounds over what may be a long period, that conservative starting loan-to-value ratio is one of the structural safeguards built into the product.

Who qualifies

The borrower needs to be aged 60 or over and tax resident in France. Beyond that, the lender will look closely at the property itself. It must be owned outright in the borrower’s personal name, with no outstanding mortgage and no commercial activity attached. Properties held through an SCI (Société Civile Immobilière) are not eligible, because the SCI structure places legal ownership in the company rather than the individual.

The home can be either a main residence or a second home, but it must be located in metropolitan France. Properties run as gîtes or let on a long-term basis fall outside the criteria. The home is then valued by an independent expert, and the loan agreement is signed before a notaire with a statutory reflection period, in the same way as a standard French mortgage. Cold-calling and unsolicited doorstep marketing for these loans are prohibited under French consumer law.

What French law does for the borrower

The defining feature of the prêt viager hypothécaire is the no-negative-equity guarantee written into the consumer code. The total amount repayable is capped at the value of the property when the loan falls due. If the loan plus accumulated interest grows to exceed the eventual sale price, the lender absorbs the shortfall. Heirs can never inherit a liability greater than the home itself, and they keep the option of paying off the loan from other funds and keeping the property if they would rather not sell.

There are trade-offs to weigh. Because interest compounds, the eventual debt can be considerably larger than the sum originally drawn, which reduces what is left for beneficiaries. Anyone considering this route should take independent advice, particularly around French succession law and the implications for any UK-based estate planning, before committing.

Common uses

In practice, the funds tend to go towards renovating or adapting the property for later life, helping children or grandchildren onto the property ladder, supplementing retirement income, covering one-off costs such as care at home, or simply giving the borrower a freer hand financially without having to leave a house and a region they have no wish to leave.

Working out the numbers

French Mortgage Xpress arranges prêts viagers hypothécaires for English-speaking owners across France. The most useful first step for anyone weighing whether the product fits is usually an indicative valuation: a clear figure for what could be released from a particular property, set against the borrower’s wider plans, family situation, and longer-term thinking about the home.