French Mortgage Watch – March 2015

french alps property

French buying conditions now within 10% of peak as rates drop to all-time lows

The standard fixed rate for 20 years now stands at an amazing 2.55% with rates lower than that available for the best applications. Variable rates are now below 2% and sales of French property are continuing to skyrocket.

With the euro now up to 25% weaker against a basket of currencies French real estate, the deposit and the monthly payment on the mortgage are now on average 20% cheaper for many international buyers.

These now really are unprecedented buying conditions. The weak euro and ultra-low interest rates, combined with good supply of property across la belle France, are driving sales increases with many agents of 50% and higher. So far this year we have already sent completed mortgage applications surpassing last year’s total.

It is tricky to say how much the situation could improve for non-resident buyers. The euro could weaken further and interest rates could drop but it is hard to see either moving in the non-resident buyers favour by more than 10% (maximum of £1 up to €1.60 or a 20 year fix down to 2.25%) from here. So we are now within 10% of the peak situation, which is certainly a good time to buy.

French Mortgage Watch – March 2015

French Mortgage Best Buys
2.00%20 years80%Tracker mortgage 3m euribor +1.9%
2.10%25 years80%Tracker mortgage 3m euribor +2.0%
2.55%20 years80%Rate fixed for the term
2.80%25 years80%Rate capped + 1.5% for 10 years
3.15%25 years80%Rate fixed for the term
3.30%25 years85%Rate fixed for the term
Interest Only
2.30%15 years70%Tracker +1.95%
2.60%15 years75%Tracker 3 month Euribor +2.55%
3.45%15 years70%Fixed rate

France in the Press

Residential property buyers are not the only ones betting on the French economy, large-scale investment groups are at it too…

Thor bets on French economy with Paris nightclub purchase

Emmanuel Macron vows to push through French economy reforms

EU Requests France Adopt Additional Budget-Deficit Cuts

Property of the month


Chalet des Ours – €5.2m

  • Up 80% LTV mortgages available
  • 385 sqm in the centre of Megève
  • 300m from the slopes

Find out more

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Rate and indices

European Bank Base Rate and Euribor
The 3-month Euribor has dropped to an all time low of 0.022%, pushing down French mortgage rates even further. The vast majority of all French mortgages use the 3-month Euribor as their reference index with a margin added on top. Current margins are in the region of 2% over the 3 month Euribor.

tips for french mortgages

Fixed rate mortgages: The TEC 10 index

After a little rebound last month the Tec 10 has again dropped to new all-time lows of 0.42% this week. The TEC 10 index in France gives an indication of how much the French government is charged to borrow money on a 10-year basis. In this way it is also an indicator of economic confidence and the perceived outlook for growth. Movements in the TEC 10 often produce changes in the available fixed rate mortgages in France. These changes are not instant and usually take a few weeks to come into effect.

french private finance mortgages

Currency Rates vs Euro

No inflation – or ‘noflation’ as many are calling it – is what’s being seen in the UK at the moment and this is what is helping the euro gain back some ground on sterling. However, the market is still very competitive for UK buyers especially for those who have been watching and waiting over the last six months. The euro has also bounced back slightly on the dollar, yet again, there is still a 20% difference compared to figures from a year ago.


GBP 1 buys€1.36
USD 1 buys€0.92
AUD 1 buys€0.72