Mortgage Update: Recently-Asked Questions from FrenchEntrée Readers

In this week’s Mortgage Update we’re going to look back on some of the genuine questions asked by FrenchEntrée readers and prospective property buyers, and share the answers from our team.

Q: “My wife and I are both over 70 with reasonable pension income and property assets. Can we get a Euros mortgage in France?”

A: No, it is extremely unlikely that a French lender would consider you for a loan after the age of 70. After the age of 60 life insurance premiums can climb significantly, and most loans require the borrowers to be aged (typically) 75 or under at the end of the term – not the start.

*

Q: “Can I release £20,000 of equity from my ski chalet which is valued at €150k and which I own outright?”

A: No, equity release products in France are for higher-value sums – usually a minimum drawdown of €150k to €200k. It would not be possible to release equity of €20k.

*

Q: “I want to release €200k from my French property on the Côte d’Azur for renovations and to supplement our pension to provide a buffer against Brexit and the impending recession. Can I do that?”

A: In part, yes. Subject to being able to demonstrate you have sufficient income and resources to cover the repayments on a €200k loan, assuming that your property is valued at, say, a minimum of €500k, you can use the funds for renovation to the property. You cannot, however, use any of the funds for general living expenses or to top up your income. Equity release in France can only be used for one of two purposes – renovation work (on that property) or to buy/investment in another property.”

*

Q: “I am a US citizen and want to buy a small holiday home in Normandy. I would like to part-fund this with a loan of €100k (the property is on the market at €160k). Will this be possible?

A: Unfortunately not. Current loan-to-value amounts for US citizens (or taxpayers) with French lenders is around 60% to 70% maximum, with a minimum loan value of around €150k. Therefore, conservatively, someone from the US looking to buy in France and wanting finance needs to be expecting to borrow a minimum of €150k against properties of approximately €240k and upwards.

*

Q: “I am an Australian citizen, and my wife is Canadian. Will it be possible for us to borrow in France?”

A: Yes. Those are two nationalities looked upon favourably by the majority of French lenders who finance international buyers of French property – subject to status, of course.

*

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]