Is it easy to get a French mortgage?
PUBLISHED: 13:14 01 May 2019 | UPDATED: 15:53 01 May 2019
Even if you can buy a French property outright, it might be worth using a mortgage, but how hard is it to secure French finance? Fiona Watts has the answers
French banks have made it very clear that they will continue to loan to non-resident British buyers, regardless of Brexit.
Buying with a French mortgage can also mitigate the unfavourable exchange rate by reducing the amount of your sterling savings you will have to convert into euros and keeping your debt in the same currency as your asset. Furthermore, unlike in the UK, it is virtually impossible to release equity from your property later; no-one can predict what the future holds, so locking up your sterling savings indefinitely seems unwise, especially when taking out a French mortgage means you can keep your nest egg earning interest and, with the rental returns, even make money!
French mortgage rates are still very low (starting at around 1.35% for 15 years) and unlike in the UK, you can fix rates for the lifetime of the loan (up to 25 years in some cases). There are repayment and interest-only products available at LTVs up to 85%. As an example, a €250,000 mortgage at 2% at 60% LTV would cost €417 per month on an interest-only basis. This would allow you to purchase a three-bedroom chalet in Morzine for around €415,000 which could be rented out for €3,000/week over school holidays!*
Obtaining a French mortgage is not as straightforward as in the UK. The French banks are forensic in their analysis and require a lot of paperwork. However, a good FCA-registered international broker will be able to advise you on the most suitable products from the available lenders and should guide you through the process step-by-step all the way to completion (unlike in the UK where their role ends after the mortgage offer is issued).
So your biggest challenge is probably deciding where to buy!
Fiona Watts is the managing director and co-founder of mortgage broker International Private Finance
*French mortgage rates and LTV is dependent on an individual's personal and financial circumstances. Please contact a French mortgage broker for a thorough assessment of your situation to advise you on which products you would be eligible for.
At the time of publication the château in Brive la Gaillarde pictured is on the market with Leggett Immobilier for €1,286,250