• Buying in: Courchevel
• Property price: €265,000
• Loan amount: €225,000
• Interest rate: 2.35% fixed
• LTV: 82%
• Term: 22 years
• Type: Repayment

The Background

The client has found a Savoyard-style property in Courchevel La Tania in an existing and well-occupied development. He planned to use the property purely for investment and the client had already found an excellent rental management company.

This self-employed client wanted to obtain a mortgage on the longest possible term and wanted to use his rental income to cover the mortgage repayments. Originally, we decided to apply for a repayment mortgage with 70% LTV to be repaid over a course of 20 years. However, our French bank has strict rules when it comes to affordability which meant that this option was not feasible due to two reasons: the high debt to income ratio and a lack of savings. 

Our Approach

Having consulted with the underwriters and the client, we opted for a slightly longer term of 22 years with a fixed interest rate of 2.35% for the term and 85% LTV. This way the affordability ratio met the bank’s requirements and the client had a satisfactory amount of savings after the transaction without pulling out funds from his company. 

While the slightly longer duration increases the total interest which will need to be paid, we were able to secure the mortgage on terms that are simply not available in the UK as the client only needed to pay a 15% deposit and fees.