Almost one-fifth of French are now remortgaging

Whilst foreign buyers have to rub their eyes every three months as they watch French mortgage rates fall further, the French are also making use of the historically low rates by remortgaging.

In 2014, just under one in five mortgages was a re-mortgage on a domestic property, according to new figures from the Crédit Logement financial observatory.

Households already in debt want to take advantage of historically low borrowing rates.

Some in the industry (not us) predicted French mortgage rates to rebound slightly towards the end of last year. What has actually happening has been the complete opposite.

At the end of 2014 credit rates in France averaged around 2.38% (excluding the cost of collateral and guarantees), rates not seen since the late 1940s. It is no wonder so many French with outstanding mortgages are quickly movement to reduce their borrowing costs.

In total 17.0% of all mortgages in France were re-mortgaged loans, but this was actually down from 17.2% in 2013. A marginal difference, but it is one that has sparked some disagreement over the accuracy over the figures.

“It is difficult for the market whole to establish accurate statistics, for example to distinguish precisely what falls from a pure rate renegotiation or operation prepayment as part of a sale followed by a new purchase, ” warns Nicolas Pécourt, communications director of Crédit Foncier.

The other challenge to these figures is that banks are reluctant to give such information because there are nervous about giving competitors the inside edge on the true sentiments of the market. Nevertheless, the general findings are ones of strong momentum towards remortgaging by domestic French owners.