Well we have now reached another milestone for these historic French mortgages. Buyers looking to secure a French loan in the near future can now enjoy these record low rates, which also include a 25-year fix from 3.15%.
When I first started in this market the thinking was that if you would be able to fix your mortgage under 4% for 20 years you would be on to a winner. At current rates, buyers can save approximately 12k per 100k borrowed over a 20-year term versus a rate of 4% [Fig.2] and when inflation returns to 2% per year the real interest rate on this loan will be less than 1%.
It is great to see that property yields in France are also fairly stable and have not fallen in popular areas. With a return of 3.8% net you can now more than cover off the interest charges on a 20-year repayment loan at 2.9% and the rental should also cover 25% of the capital payment [Fig.1].
Not many things are fixed or certain in this world but a French mortgage can be and I think you can be fairly certain about the value of 2.9% fixed over 20 years.