How French banks can help British investors during the COVID-19 pandemic
Due to the economic implications of COVID-19, many homeowners in the UK are able to benefit from a three-month mortgage holiday. This enables them to pause their mortgage payments on their primary residence as well as any buy-to-let properties.
Emmanuel Macron spoke recently about mortgage breaks in France which led to some confusion regarding who was eligible. However, it has been confirmed that this relief would only be available for businesses, not for individuals.
However, French banks are prepared for many eventualities – if not everything – and there is generally a clause in the contract for mortgage holidays.
We are still investigating the situation with our partners.
Take a look at our French mortgage holiday summary below:
What is a mortgage holiday?
A mortgage holiday is an agreed pause from mortgage payments when the borrower is going through an unusually tough time financially. It is a temporary solution.
A mortgage holiday is not a gift from the bank. You will still need to pay the capital back and the interest accrued during the mortgage holiday is added to your outstanding balance. That means you will pay interest on the interest.
Who can benefit?
Everyone with a mortgage must check their mortgage offer. The mortgage holiday clause is generally built-in to the contract. Though you will not need to produce any documentation in most situations, you may be asked if you suffered any income loss to justify the mortgage holiday.
How long will it last?
A mortgage holiday will last one month in most cases. However, some partners are providing a more generous three-month mortgage holiday to help clients who have suffered financially as a result of COVID-19.
Who to contact?
Contact the customer service department of the bank with whom you have the mortgage. If you are unsure, contact your broker at French Private Finance and we can guide you through the process and give you the details you require. During this time, it is not unusual to experience a slower response from the French banks. They are currently flooded with demands and some banks are receiving up to 200 mortgage holiday requests a week.