It’s worth bearing in mind, as you plan your purchase, the minimum criteria for what French banks will lend if you’re looking for a mortgage.
Over the last few weeks, since the start of the coronavirus pandemic, and the likely recession (or depression?) which will follow, we’ve seen a clear polarisation in the property enquiries we’ve received. This follows exactly the same pattern as the behaviour immediately after the 2008 credit crunch. Enquiries are either at the lower end of the scale – typically sub-€100k properties (projects, holiday homes, apartments etc) – or over €500k.
This has had a knock-on effect on our conversations with potential mortgage clients. For the sub-€100k enquiries unfortunately we’ve had to disappoint a fair number of individuals.
In our experience French lenders will only consider at minimum loans of €100k to non-residents/international borrowers. With the sun shining, a good wind and a favourable underwriter, banks might consider an 80% LTV against a property valued at €100k (or an €80k loan).
Furthermore, this €100k minimum is what you’d expect for a British or EU citizen. Minimum lending amounts tend to be higher for non-EU borrowers – Americans, Australians etc, where it is doubtful that a lender will consider a loan of under €200k.
French lenders will lend under €100k, but these files tend to be for domestic borrowers looking to move within France, fiscally-resident and relatively low-risk.
This week I’ve seen enquiries between €20k and €60k – being candid, a French mortgage is unlikely to be the solution. If you’re looking for a loan for a smaller/cheaper property, or a more modest top-up for a larger property, you would be better off raising finance in your home country and arriving in France as a cash buyer. You’re also likely to be able to strike a harder bargain with the agent/vendor if you have the cash in your bank account and can complete quickly.
If you’re a British or EU citizen and looking at properties over €120k, have a reasonable income with modest outgoings, and ideally have some assets/savings behind you to reassure the bank that you are a ‘safe bet’ – please get in touch. If you’re one of our many Australian, American or Canadian readers (other nationalities are available) and you’re looking at properties over €200k, please get in touch.