Fixed & Variable Rate French Mortgages
|Rate description||Max term||Type||LTV||Deferred payment||Bank set up fees||Early repayment fees|
|1.50%||2.21%||Variable||20 years||Tracker repayment||70% (100% LTV with 30% collateral)||24 months||1% capped||None||Enquire|
|1.55%||2.13%||Fixed for the term||20 years||Fixed repayment||70% (100% LTV with 30% collateral to be held in €)||24 months||€2,000||6 months interest on the amount repaid||Enquire|
|1.85%||2.41%||Fixed for 3 months at 1.85% then Euribor 3 months +2.15%||20 years||Tracker repayment||85%||24 months||1% capped||None||Enquire|
|2.20%||2.78%||Fixed rate for the term||20 years||Fixed repayment||70%||24 months||1% capped||6 months interest on the amount repaid||Enquire|
|2.55%||3.10%||Fixed rate for the term||25 years||Fixed repayment||85%||24 Months||1% capped||6 months interest on the amount repaid||Enquire|
Learn more about French Repayment Mortgages
The above French mortgage best buys are for Repayment Mortgages. Repayment mortgages are generally more expensive as you have to pay the interest on the €100,000 and also pay off a portion of the capital. Of course with French mortgage rates so low the long term value can be substantial, especially when compared to rates of other European countries. Repayment mortgages are often called ‘capital and interest’ mortgages and the payment for €100,000 rises to say, €7200 per year, or almost double the cost of an interest only mortgage. Repayment mortgages are best used for main residences or for investments, like leasebacks, where the aim is to pay the mortgage off and/or enjoy the income. Repayment mortgages (prêt ammortissables) are the most common mortgages in France and offer the most protection.
Interest Only French Mortgages
|Pure Rate||APRC (for €100k)||Rate description||Max term||Mortgage type||LTV||Deferred payment||Bank set up fees||Early repayment|
|1.87%||2.58%||Fixed rate for the term||5 years||Fixed interest only||100% (min AUM of €1m)||None||1% capped||6 months interest on the amount repaid||Enquire|
|2.30%||2.96%||Tracker 3 month Euribor + 2.60%||14 years||Interest only||75%||24 Months||1% capped||None||Enquire|
|2.59%||3.11%||Fixed for the term||10 years||Interest only||100% (min AUM of €1m)||None||1% capped||None||Enquire|
|2.55%||3.35%||Fixed rate for the term||7 years||Fixed interest only||75%||24 Months||1% capped||6 months interest on the amount repaid||Enquire|
Learn more about French Interest Only Mortgages
In a strict ‘interest only’ mortgage, during the period of the loan the borrower pays only the interest portion. In France interest only mortgages are know as ‘prêt in fine’ mortgages and are many ways to structure these so be sure to choose the right one for you. With interest only French mortgages the debt on the property is not being covered but in some cases the capital is normally secured through an endowment policy taken out with the lender that pays off the capital at the end of the loan period. There are variants on this approach, that do involve the repayment of capital during the later phases of the mortgage.
Annual Percentage Rate of Charge, usually called an ‘APRC’ is an annual interest rate which takes into account fees and charges to reflect the total cost of your mortgage. Your Mortgage Illustration will detail the fees which are included in this calculation. An APRC is calculated using a standard method so it provides an effective way for you to compare quotes from different lenders.
2.45% over a fixed rate of 25 years
Courchevel, French Alps
Whilst the average duration of a French mortgage taken by a non-resident is 20 years, often clients end up choosing to gear their mortgage in France towards a longer term product to ease the process of buying another property in France.
In this month’s French mortgage transaction of the month, the client, a 48 year old buying a €640,000 ski apartment in Courchevel opted for a fixed rate repayment mortgage to be spread over 25 years at a rate of 2.45%. Over a duration of this length the maximum loan-to-value rate is 80%, therefore requiring a 20% deposit. … Read more transactions
Half repayment, half interest only
Les Portes du Soleil, French Alps
This month’s French mortgage transaction of the month highlights the renewed trend of international clients taking mixed French mortgages; half repayment, half interest only, instead of simply repayment only.
Mixed French mortgages are a clever way of reducing the amount of interest you pay overall by structuring your mortgage in a way that enables early repayments without paying the sometimes-costly early repayment fees that are associated with long term fixed rate repayment mortgages. … Read more transactions
2.45% French mortgage for fixed for 20 years
Cannes, South of France
Going against the grain of the seasons, this month’s French mortgage transaction of the month takes us away from the wintery alps, to the warmer climes of Dubai and Cannes.
This was the third purchase in the last year by our client, who is based in Dubai and has moved quickly to secure rates whilst they’re at their lowest. … Read more transactions
3.10% French mortgage for fixed for 20 years
€328,000 ski apartment
Les Porte du Soleil, French Alps
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.
3.25%, 20 year mixed French mortgage
€832,000 second home
South of France
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.
3.25%, 20 years fixed
€330,000 Leaseback property
Les Menuires, 3 Valleys
It was great to see fixed rates back to these historic lows. A fixed rate for 20 years at 3.25% creates a lot of value over the long term. This was a 70% loan on a leaseback property in Les Menuires in the Three Valleys 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.
<1% variable loan through private banking structure
For property in Belle Plagne
This 40% loan was made with a private bank in Luxembourg to an SCI created in France. The loan was secured against the property (in Belle Plagne) 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.
3.2% interest only, fixed for 9 years
€6m luxury in Val d’Isere
This month we received an agreement for a loan at €2.5M euros 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%.
€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.
3.50%, 20 year capped
€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.