France Mortgages

Thanks to thousands of overseas buyers having already bought property in France, foreigners looking for a mortgage to finance a French property purchase will find the procedure relatively simple and straightforward. Several lenders, both British and French, specialize in providing loans to would-be French property purchasers.

Foreigners can often obtain 100% finance and with interest rates capped at 4%, a French mortgage is a very attractive option to many investors. Fixed rate mortgages are also available, but not for short terms. Generally they are only available for between 10 and 20 years. The maximum term for a French mortgage is 20 years or up to the age of 70, whichever is sooner.

British lenders include Abbey, Halifax, HSBC and Woolwich who are the main providers from the UK. French mortgage lenders are often also subsidiaries of UK lenders such as Abbey National France or Barclays. They will use what is known as the “indebtedness ratio” to calculate how much they will lend you: Rather than multiplying your salary by 3.5 as is done in the UK, lenders in France require you to prove that a third of your total gross monthly income can cover the mortgage repayments. This covers anything from personal loans to utility bills and monthly mortgage payments.

Some developers of new build and off-plan developments offer installment plans over between 12 to 60 months and charges applicable vary according to developer. The Government’s Leaseback system offers purchase with guaranteed rental over many years and yields of some 5.5%, more than covering the cost of mortgage interest, as well as allowing a full VAT refund of 19.6%.

If you possess property in your own country and would like to borrow against this in an equity release plan, we can introduce you to an independent financial advisor who will help you raise the necessary finance.

Please click here to speak with an advisor who can give accurate figures for your personal circumstances.