Mortgage Update: 12 Useful Things to Know about French Mortgages

• The most common mortgage product in France (and the most easily obtainable) is a Capital Rayment mortgage.

• Interest-Only products are possible, but they are considered a tax planning product in France, therefore have very strict wealth and income tests.

• Equity Release is available in France, but there are conditions on how the equity can be used – typically only for renovations/improvements or investing in another property.

• Remortgaging products are available but limited; they can’t really be used to increase an existing mortgage. French lenders view mortgages as long-term products, they don’t expect homeowners to change every 5 years.

• Loan durations are typically from 6 to 30 years.

• Maximum Loan-to-Value is up to 75%-80% for EU nationals; up to 60% for US/Non-EU Nationals; 100% for French tax residents.

• All mortgage products require borrowers to pass very strict Debt-to-Income ratios.

• Mortgage protection life insurance is required for all products with an LTV over 50%.

• It can take as long as 12-14 weeks to process a mortgage application from initial enquiry to release of funds.
• Most non-residents have to borrow a minimum of €100k for the loan to be considered. Loans of anything less are extremely unlikely.

• It is worth investing the time upfront to make sure your finances are packaged together in the most attractive and transparent way for the French bank analysts and underwriters; you usually only get one short at the title and there is very little right to appeal!

• Using a broker can make the experience much smoother and more likely to go through…

Please get in touch if you have any questions about financing a property in France, and we’ll give you our no-nonsense view as longstanding experts in the French property market. Contact us: [email protected]