LOTS OF CHOICE FOR YOU
French mortgage products are designed to maximize security to the borrower as this is what the market wants.
Therefore the majority of loans in the French mortgage market will be on a long term fixed rate or a capped rate.
- With an interest only mortgage (prêt in fine), as the name suggests you only pay the interest on the amount you borrow. If you borrow €200,000 at a 2% interest rate you will have to pay €4000 per year.
- After 20 years you will still owe the €200,000 and have to sell the property or find funds from elsewhere to pay back the money you have borrowed.
- Hopefully the property you bought will have appreciated in the meantime so you will have made a profit whilst keeping your costs down.
- Interest only mortgages are the mortgage of choice for investors looking to make a return by selling the property for more than the purchase price..
REPAYMENT MORTGAGES
- Both the interest due and part-captial paid back monthly
- The rates are generally 1-3% lower than UK/USA interest rates
- The Euro Interbank Offered Rate (EURIBOR) is used as the base rate
- Generally added margin of 0.5%-2% above 3 or 12 month EURIBOR
- Check online at the European Central Bank
SWITCH PRODUCT MORTGAGE
- Best of both worlds – part Repayment part Interest Only
- Ability to start with high repayments then reduce at retirement age
- Allows for excellent money management
- Repayment element can have a ‘capped’ rate
- Interest Only can help offset against French Wealth Tax
- Exempt from fees in event of partial or full early redemption