Posts in category: Transactions

November 2015 – French Mortgage Transaction of the Month

Whilst the 3 month euribor has remained in the negative there is a sense that rates may fall further, yet this has not stopped the appetite for the current 20 year fixed-rate mortgage product.

At 2.70% the average monthly repayment cost per £100,000 borrowed is £535, which for a product over 20 years shows huge value. This is the highlighted product for this month’s French mortgage transaction of the month.

The client from Staffordshire, England, borrowed €380,000 at a loan to value of 80% on a classic freehold apartment in Méribel in the 3 Valleys ski region of the French Alps.

The client could have borrowed less, having enough personal contribution to lower the loan to value, however with French mortgage rates so low he decided to use the additional money for a furniture pack instead.


October 2015 – French Mortgage Transaction of the Month

This month we broke a new record! The average French mortgage loan takes around two months to go through, but this month’s French mortgage transaction of the month shows that it can actually happen in less than two weeks.

Now we will admit that the loan to value was lower than normal – at around 35% – but the speed at which this variable interest only loan (at 2.30%) was secured was mostly to do with the efficiency applied to the paperwork.

After having received their decision in principle, the client’s required documents were supplied to us quickly (almost in a matter of hours) thus enabling us to move very swiftly on the full application.

For further information on the French Mortgage Process please follow this link or alternatively speak to one of our advisers.


September 2015 – French Mortgage Transaction of the Month

September’s transaction of the month is on a new-build ski apartment in Chatel, with the buyer taking a loan of €450,000 (almost on the nose of our average loan amount so far this year).

The rate taken was the market leading fixed rate for a 20-year duration loan – 2.70%. The loan to value ratio was around 80%. The apartment enjoys a very good location in this increasingly popular resort and as such the buyer intends to rent it out for as much of the year as possible.

Of course, it’s worth repeating here that whilst the property will certainly generate an income which will be put towards the mortgage payments, technically French banks to not offer buy-to-let mortgages as you would find in the UK for example. Rental income is not taken into account for affordability, instead it is just your normal criteria over assets, earnings, etc that are taken into account.

By letting the property out and agreeing to provide a handful of basic rental services such as linen changing, key holding and breakfast provision, there is a chance that the client will be able to recoup the 20% VAT as the property is contributing to the tourism industry of that resort. Such a rebate would represent a considerable saving, although the VAT rebate is pro-rata over 20 years, which means should the client stop renting the property out after 5 years, then 15% would need to be paid back.


August 2015 – French Mortgage Transaction of the Month

This month’s transaction of the month is on a large villa in the South of France. With a loan value of €3m and a property price of €5m, the client put down a reasonably sized deposit at 40%.

On the sum of €3m we managed to source the client a 10-year repayment loan at a rate of 2.85%, a good level for such a large loan on a shorter than normal repayment period.

The client bought the property using and SCI (Société Civile Immobilière). An SCI is essentially a private, limited and fully incorporated company with a registered office in France. This ‘office’ can be the property itself and then shares of the SCI then own the property in question.

There are many advantages of owning a French property through an SCI, including taxation benefits. Yet perhaps one of the most commonly appreciated advantages is that, being a company, the shares of the SCI are owned by its shareholders, in many cases, family members. This means that throughout the course of a buyer’s life they can bequeath shares to members of the family in a tax-efficient manner.

For further information on buying French property through an SCI or French mortgage in general, please get in touch with us.


July 2015 – French Mortgage Transaction of the Month

Foreign expats living in the UK are also making the most of low French mortgage rates and have become a new buying force in the market as they too coin in on the strong pound.

This month’s French mortgage transaction of the month was processed for a Russian client, living and working in the UK, who wanted to exploit the weak euro and low French mortgage rates to buy an apartment in the South of France.

He chose Cannes as it stacked up in terms of rentability, with its countless shows, exhibitions and events happening all year round. We secured a loan of €250,000 on a €350,000 property at 2.55% fixed for 20 years.


June 2015 – French Mortgage Transaction of the Month

French rates have risen over the past month, but incredible long term value can still be locked, as we show in this month’s French Mortgage Transaction of the Month.

We secured a 2.70% fixed repayment loan over 20 years for a British buyer working in both Paris and London. The €300,000 loan was on a property of around €375,000 for a for a one bedroom new-build apartment in Paris.

As the property is off-plan the buyer only has to pay 2.5-3% Notary fees, instead of the 7-8% payable on resale property, therefore the saving here is considerable and was definitely worth it to this client who was happy to wait for the eventual completion date (Q4 2016).

All clients taking on a mortgage in France must be able to show ‘rainy day funds’, which are simply a level of savings to show you could continue to make repayments should anything go wrong; job loss, etc.


April 2015 – French Mortgage Transaction of the Month

Fixed 20-year mortgages become the most popular product as non-resdient buyers continue to get the most out of the market

Over the past four weeks the majority of our applications have been for classic freehold property (not leaseback) with buyers opting for long term fixed rates of 2.55% over 20 years, usually on 80% loan to value.

Therefore its no surprise that this month’s French mortgage transaction of the month also falls into this category. The couple in question bought a ski property in Chalet at €500,000, providing 20% upfront with the remaining 80% on loan at 2.55% across 20 years.

The couple had the means to shorten the term, although with some family planning circumstances potentially coming into play over the next 10 years they opted to keep the term at 20 years at the low rate and therefore minimise they monthly outlay.

 

 

 


March 2015 – French Mortgage Transaction of the Month

Second time lucky for alpine property hunters – 2.55% fixed for 20 years at 80% LTV

This month’s French mortgage transaction of the month was for a 80% loan (€404,000) on a three bedroom new-build ski apartment in the 3 Valleys priced just above €500,000.

It was their second time around trying to acquire a property in the French Alps. The first time they were quoted a super low rate by a broker which failed to materialise from the bank, by which time the property they originally wanted was reserved by another buying.

This is a common theme at the moment, especially with new-build properties that are selling quickly. It is very important that those buying get ahead of the game with realistic finance options so that when crunch time comes, they do not fall behind as a result of unachievable mortgage offers.

In the end the couple in question we were able to secure a very favourable rate of 2.55% fixed over 20 years, thus providing very good long term value and transparency.

 


February 2015 – French Mortgage Transaction of the Month

February’s French mortgage transaction of the month is another demonstration of how more and more bit ticket French property buyers are making the most of the super low mortgage rates in France.

The transaction was on a €1.9m loan fixed over 18 years at an incredible 2.75%. The property was a €3.5m chalet in the French Alps.

The buyer used an SCI (Société Civile Immobilière) to structure the purchase. An SCI is essentially a private, limited and fully incorporated company with a registered office in France. This ‘office’ can be the property itself and then shares of the SCI then own the property in question.

There are many advantages of owning a French property through an SCI, including taxation benefits. Yet perhaps one of the most commonly appreciated advantages is that, being a company, the shares of the SCI are owned by its shareholders, in many cases, family members. This means that throughout the course of a buyer’s life they can bequeath shares to members of the family in a tax-efficient manner.


January 2015 – French Mortgage Transaction of the Month

Transaction of the month – Big savings by expat in Switzerland 

This month’s transaction of the month is by a british expat based in Switzerland. He saw his targeted property – a villa in the South of France – reduce in price by 15% overnight after Switzerland release the rate cap on the Euro.

Of course, as well as a reduction in price, his affordability also increased, enabling him to secure a 9 year fixed rate of 2.75% on roughly €1.5m of borrowing. the property value was around €3.0m.

There have been a number of CHF buyers coming through over the past week and we expect to see many more as the outlook for buyers improves in France.


December 2014 – French Mortgage Transaction of the Month

News of the current all-time low French mortgage rates is being heard further than just Europe, as is shown by our French mortgage transaction of the month for December. Here a UK expat working in Hong Kong decided to capitalise on the low rates and secure a property next to the beautiful Lac Leman, otherwise known as Lake Geneva.

This location was perfect for them as, in addition to having the lake on their doorstep, they are also 90 minutes drive away from countless ski resorts. They opted for a 70% LTV mortgage of roughly €250,000 on their property securing a rate of 2.90% over 20 years.


French Mortgage Transaction of the Month

20 year mixed French mortgage with a variable rate at 2.00% and fixed rate at 3.00%

November’s transaction of the month is another example of a growing trend with both current owners and new buyers who are opting to secure mixed variable & fixed rate mortgages to get the best from both types of finance.

The couple – who were from Sussex and in their late 40s – were acquiring an 80% LTV French mortgage for large three bedroom property in Les Gets. The property was priced at €792,000 including VAT and two thirds of the mortgage was on a fixed rate to make the most of the historically low rates, securing them long term over 20 years.

The couple wanted to be able to make early redemption payments without incurring any penalty fees so they opted to put the remaining one third of the mortgage on a variable rate. Overall this was a great way of exploiting both the super low rates and also the flexibility in the market.


French mortgage transaction of the month

Transaction of the month – a refinanced €284,000 variable rate mortgage transferred to fixed rate of 2.4% for 15 years

With French mortgage rates dipping so low those with existing loans on variable rates have been very very happy. Yet the interesting thing is, instead of riding the wave further to hold out of lower rates, many people are choosing to refinance and switch to a fixed rate to lock in a super low rate for the rest of their repayment period.

October’s transaction of the month was for a refinanced loan of €248,000 on a large apartment in Meribel in the French Alps. The couple bought the property in 2005 and has been on a variable rate of 1.3% over the three month Euribor (which is currently at 0.082%)  and they have taken the bold, and in our opinion, savvy, step of switching to a fixed rate whilst the rates are extremely low.

Of course French rates may dip a little further, but with a rate of 3.0% fixed for the next 15 years they are very comfortable with their property finances and can plan well ahead into the future. We expect to see many more current owners in France with both variable rate and higher fixed-rate mortgages switch to lower fixed rates over the next few months.


French Mortgage Transaction of the Month

Transaction of the month – €328,000 loan for 20 years @ 3.10%

Whilst September’s transaction of the month is quite a simple one – just a 20 year fixed on an average loan amount – the interesting aspect of it is in the value. With rates dropping to new all time lows we were able to secure a fantastic loan for a couple buying their first property abroad in a popular resort in Les Portes du Soleil, Haute Savoie.

With the duration of the loan over 20 years and such a low rate they did not need to factor in rental income in order to afford the property, instead it will just be there ready for whenever they want to use it.


French Mortgage Transaction of the month

Transaction of the month – 20 year mixed French mortgage with a variable rate at 2.60% and fixed rate at 3.25%

August’s transaction of the month is quite interesting. Essentially it was a 80% LTV French mortgage for a property on the South coast for a property priced at €832,000 including VAT, but the mortgage was actually split into two.

Two thirds of the mortgage on a fixed rate to make the most of the historically low rates, securing them long term over 20 years, but the remaining one third of the mortgage was put on on a variable rate so they would be allowed to make early redemption payments with NO penalty fee. Overall this was a great way of utilising both the super low rates currently available and also the flexibility in the market.