The French mortgage market, May 2013
The French mortgage market is currently one of the cheapest places to borrow money to buy a property in France. In fact the rates on offer are the lowest seen in France since WWII and for the short to medium term show few signs of increasing and may even decrease thanks to the ECB cutting its rate from 0.75% to 0.5% on the 3rd of May. In fact increasing competition between banks for clients with solid financial profiles is creating some absolutely outstanding offers for borrowers.
Currently the best variable rate capital repayment mortgages are from 2.3% and the best fixed rate over 25 years is 3.75% with a max loan to value of 80%. Interest only mortgages are still available through French banks however the acceptance criteria are far stricter than for repayment mortgages. You also typically pay about 1% more for an interest only mortgage in France which makes them less appealing, however variable rate interest only mortgages currently start from as little as 3.25% which is still pretty attractive.
Due to the significantly better rates on offer than a few years ago many people are also choosing to refinance existing mortgages on their French property as rates are typically about 1 to 2% less than they were back then. There is a mortgage set-up fee by the bank typically about 1% of the value of the mortgage and a mortgage registration fee for the notaire of 1.5% however this is insignificant compared to the savings that can be made.
Lastly, some people who bought their properties in France ten or more years ago will have enjoyed a good capital appreciation and may be looking to release some cheap money for other purposes or renovations etc. For these people there are also some good rates on offer for equity release starting from 3.55%.
So as you can see there are some outstanding mortgage offers out there at the moment and coupled with the favourable market for French property buyers there has never been a better time to act. If you wish to apply for a French mortgage service or simply if you have questions then please don’t hesitate to contact Leapfrog Properties Mortgages.