October saw average French rates fall to their lowest level since the Second World War. The average rate now stands at 3.30%, down from 3.40% the previous month. One of the reasons rates are now so low is that the interest rate on long term government debt is at its lowest level for 200 years. As the French market has fixed rates for the term of the mortgage as well as a wide range of capped products, you can limit your exposure to future rate rises and lock in long term value. Quite simply, the cost of borrowing money in France has never been this cheap or secure for such a large number of people before. The euro may be strong now, but the fact that you can access near 100% funding means that it does not matter what the exchange rate is. The long term value of low rates, combined with low property prices, far outweighs any currency considerations. You can always buy Euros when the timing is right and your home currency is strong against the Euro.You can’t always buy property near the bottom of the market with historically ultra low interest rates. We have been warned that some banks will start raising their fixed rates in early November by up to 0.2% so now is the time to try to secure an ultra low rate.
To see the graphs on this topic, please view a presentation here.