French mortgage trends: Time to refinance

As you might imagine, given the ultra-low fixed rates in offer in France currently, we have seen a rise in the number of applications to refinance mortgages taken out before the financial crisis hit.

Mortgage rates

Under normal circumstances it is not generally worth re-mortgaging in France as you will have costs in the form of bank fees and mortgage registration tax. These fees and taxes usually amount to 2.5% of the amount being refinanced. These costs and vague memories of the enormous amounts of paperwork required is enough to put most people off and also the reason why France offers so many excellent long term mortgage products soborrowers do not have to regularly go through this process. The long term mortgages available in France give peace of mind to the borrower with offers such as rates fixed for the term and life time tracker mortgages (where the rate tracks at a fixed margin of the euribor which generally follows the movements of the European Central Bank base rate).

But these are not normal circumstances. Now that French mortgage rates are now at their all-time low, the numbers have become interesting. If you have a mortgage with more than €100k outstanding and can find a long term mortgage offering a rate 1% lower than your current rate, it does make sense.

The average saving once you have deducted the costs should be in the region of €10k, per €100k refinanced over 20 years.Most people know that the paperwork involved in getting a French mortgage is heavy to say the least but with the large savings now on offer it might just be worth it.

French Private Finance work on this type of applications every day and so will endevour to make the process as painless as possible. So all you will have to do is work out what you will spend those savings on.