It’s a tough mortgage market out there at the moment, so it is worth bearing in mind the minimum requirements so you don’t waste your time or get your hopes up.
What is the minimum amount I would have to borrow?
Since the start of the 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.
French lenders will only consider at minimum loans of €100k to non-residents/international borrowers.
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 €150k.
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.
Recently we’ve seen enquiries looking to borrow between €20k and €80k. In this case, 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.
What about minimum earnings?
Another important factor is that you need to be earning enough for the French banks to be interested. There is a strict income-to-debt ratio which applies, but even before the banks begin to understand your outgoings, you’ll need to have net earnings of (approximately) €30,000 pa as an individual, or €50,000 as a joint application. And that’s assuming you don’t have any significant outgoings – if you do, these topline figures will have to be higher. In our experience, anything less than this and the banks are unlikely to proceed.
Equally, don’t forget you have to be able to evidence this – easier if you’re salaried, but if you’re self-employed you’ll need to be able to show three years sustained income.
If you’re a British or EU citizen and looking at properties over €125k, 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 €250k, please get in touch.
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