MORTGAGES types of products in France

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.

INTEREST ONLY
Only interest
low payments
REPAYMENT MORTGAGE
Full Capital
Amortization
TRACKER RATES
Let's follow
the ECB
FIXED RATE MORTGAGE
Nothing ever
moves
CAPPED RATE
Blocked to
the upside
HYBRID MORTGAGE
The best
of both worlds

INTEREST ONLY MORTGAGES

  • 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

TRACKER MORTGAGES

  • Variable Interest rates that move in line with an underlying official interest rate
  • In most cases with French banks it is the EURIBOR 3 month index rate
  • A margin is typically added onto the base rate
  • From 0.50% – 2.10%
  • Reviewed every quarter or yearly

FIXED RATE MORTGAGES

  • Interest rate fixed throughout mortgage term
  • Rate can never change
  • Monthly payments stay the same
  • Rates starting from 0.90% – 2.60%
  • 3% redemption penalty typically included

CAPPED VARIABLE RATE

  • Base rate used in typically EURIBOR 3 month
  • A margin is added onto the base rate, 0.50% – 2.00%
  • Rate is reviewed every 3 or 12 months
  • Interest rate cannot go higher than the cap level
  • Cap level typically 1% above starting rate
  • Typically free of redemption charges

HYBRID MORTGAGES

  • Bespoke tailored made mortgages
  • Exotic mortgage product choices
  • Reduced monthly mortgage payments at the outset
  • Instant feedback to member questions
  • Back-to-back mortgage arrangement
  • Offset any potential French Property Wealth Tax liability

SECURING A PARTICULAR RATE

  • Secure the rate that you have been quoted
  • Send all required documents for loan application
  • Upon receipt we can forward them to the bank that day
  • We reserve the rate for you
  • Rates can change twice per month
  • So speed of application is essential

PRODUCT PROTECTION

  • Offered by French finance law
  • Always have the option to call your bank and switch to a fixed rate
  • You may have a penalty to pay if you switch
  • You will not be able to switch back
  • Charges vary from bank to bank
  • Compare the different offers in the market