Posts in category: Transactions

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.


French mortgage transaction of the month

Transaction of the month – 20 year fixed rate French mortgage in the 3 Valleys at 3.25%

Our transaction of the month for July was on a fantastic property in the French Alps. It has been great to see fixed rates back to historic lows and a fixed rate for 20 years at 3.25% creates a lot of value over the long term. This was a 70% French mortgage in the 3 Valleys on a leaseback property in Les Menuires  priced at €330,000 excluding VAT.

The property has a guaranteed rental income of 3.3% and a week in high, medium and low season which means the owner is set to receive a good level of returns whilst also being able to use the property during some great periods across the year.


French mortgage transaction of the month

Transaction of the month – <1% variable loan through private banking structure – €2.8m for a French mortgage in Belle Plagne

This 40% loan was made with a private bank in Luxembourg to an SCI created in France. The French mortgage in Belle Plagne was secured against the property to reduce the ISF tax bill and the borrower placed an additional € 3.5M in assets with the bank in floating rate bonds which increase in value as interest rates rise in order to hedge against any increases to interest rates in the future.


French mortgage transaction of the month

Transaction of the month – 3.2% interest only for a French mortgage in Val d’Isere in the Alps, fixed for 9 years

€2.5m the French mortgage in Val d’Isere in the Alps for a property valued at €6m

This month we received an agreement for a loan at €2.5m on a property in the Alps valued at €6m. The rate on the loan is 3.2% fixed for 9 years on an interest only basis. This rate represents excellent value as the recommended rate for the French government to borrow at ( the TEC 10 index) is currently 1.8% meaning this loan has an effective margin of 1.4%.


French mortgage transaction of the month

Transaction of the month – 2.40% Variable for a French mortgage in Val d’Isere

€ 650,000 Equity release on buy to let

Nice loan on 40% of the value of the property with an excellent variable rate. Loan was used to part finance a main residence acquisition in the UK.


French mortgage transaction of the month

Recent Transactions - Сannes – Mar 14

Transaction of the month – 20 year capped rate at 3.50% for a French mortgage in Cannes

€ 350,000 second home purchase in Cannes

This loan on an excellent fixed rate was made to a couple on very large incomes and went through extremely quickly and was completed in less than a month.


French mortgage transaction of the month

Transaction of the month – 15 year variable interest only at 2.60% for a French mortgage in the French Alps

€480,000 loan on an investment property

This French mortgage in the French Alps went through after some trying as there was an issue that the developer had used a guarantie intrinseque to guarantee that the property was built as per the contract. These days most French banks ask for a garantie extrensec (a guarantee of completion of the property from another bank) in order to lend.


French mortgage transaction of the month

Transaction of the month – 3.25% variable interest only French mortgage in Val d’Isere

French mortgage for the construction of a Chalet: € 2,200,000 of a € 3,200,000 purchase

This French mortgage in Val d’Isere was fairly straight forward. There were no early repayment penalties with this loan as the borrower wished to pay down the loan fairly quickly once the construction of the Chalet was finished.