Mortgage Eligibility and Considerations for Americans Buying Property in France

French banks are generally open to lending to foreign buyers, but they will scrutinize your financial profile more rigorously than they would for a French resident. Key factors include:

• Income stability: Ideally, your debt-to-income ratio post-project should not exceed 33%, meaning no more than one-third of your gross monthly income should go toward debt payments, including your mortgage.
• Creditworthiness: French banks look at your financial background, focusing on assets and liabilities.
• Down payment: Non-residents typically need to make a down payment of 20% to 30%, though some banks accept different forms of collateral, like securities or other assets, reducing the upfront cash required.
• There is no age nor family, or activity requirement. Active, retired, and entrepreneurs are eligible for a bank loan.
• The process is fully digital (application, account opening, funds release), which is very convenient for international buyers like Americans.
• Loan brokerage is a regulated activity that operates on the basis of performance fees only. In the event the broker or the transaction cannot be completed, there is nothing to be paid.

Several mortgage options are available to Americans purchasing property in France:

• Fixed-rate mortgages: These are the most popular and provide predictability. In France, fixed-rate mortgages often span 10 to 20 years, with interest rates averaging 1% to 1.5% lower than the U.S. or U.K. Although fixed, French rates can be renegotiated over time to reflect market changes, potentially lowering your payments.
• Variable-rate mortgages: These have adjustable rates based on market conditions. While they start with lower rates, they can rise over time, so they’re better suited to downing market conditions like we are in Q4 2024.
• Interest-only loans: These allow borrowers to pay only interest for a specified period, making them attractive to high-net-worth buyers looking to minimize monthly payments.

Non-residents typically need a down payment of 30% of the property’s value as well as pay cash for the transaction cost. However, offering collateral can reduce this upfront requirement. French banks may accept securities or equivalent as collateral, which can lead to more favorable mortgage terms.

Beyond the down payment, buyers must account for:

• Notary fees: Roughly 7% to 8% of the purchase price, covering legal services.
• Mortgage broker fees: Typically, 1% of the property value.
• Bank fee: Negotiable, 2000-5000€ depending on the bank.
• Currency exchange: Since the transaction occurs in Euros, it’s crucial to account for exchange rate fluctuations. The risk can be contained by using the services of Fintech providing efficient and favorable FOREX.

American buyers should be aware of France’s Impôt sur la Fortune Immobilière (IFI), a wealth tax on real estate. The IFI applies to properties having a net value of over €1.3 million. Financing through a mortgage loan reduces the net value, which delays the IFI’s exposure for 10, 15, 20 years, or so.

The bilateral tax treaty between France and the U.S. also helps prevent double taxation. It ensures that American buyers won’t be taxed twice on the same income or capital gains and may reduce their tax exposure in France.

As an American, relying on a local mortgage to finance a property in France is certainly the right approach (practically and financially). As always, it requires proper planning and understanding of mortgage eligibility, costs, and taxes. With the right advice and a partner at your side, this process can be initiated and done remotely, which is a substantial time saver.

Join Societyce2courtage, along with a panel of other experts from Paris Property Group, Moneycorp, and our visa specialist, for our free Moving to France as an American in 2025 webinar. From managing your finances and securing the right visa, to understanding the French property market and securing a mortgage, this event will be packed with need-to-know info and tried-and-tested advice. Register now to make sure you don’t miss out!

Moving to France as an American in 2025:Your Essential Guide

Thursday 7th November
6pm ET