Head of Content
Mortgage Advisor & Director
Mortgages in France
France is a hugely popular destination for a second home. Easily accessible, it’s one of the few locations where you can truly make the most of a weekend getaway. Each region has its own attractions, from vineyards and castles, to art and culture, to outdoor walking and beaches. Pick up your fresh bread each morning from the local boulangerie and enjoy la vie en rose.
Can anyone get a mortgage in France?
Yes, French lenders do not have restrictions on residency or citizenship to loan you capital, and international buyers do not have any restrictions on acquiring property. As with any lender, there are age restrictions on borrowing, usually around the age of 75.
Can I get a mortgage for renovation?
Perhaps sparked by certain popular TV shows, many expats have an appetite for renovation - to take an old forgotten property and create something truly magnificent. Securing finance for this kind of project can be difficult. If a property is uninhabitable, it will be more difficult to borrow, but a broker will be able to steer you in the right direction. If you have the relevant planning permissions and licenses it will be easier.
Any building work must be carried out by local builders - you can’t bring over your own team.
What do I need to know about getting a mortgage in France?
- Start early. The process can take time, and you may be required to put together a lot more information than you may be used to, including multiple proofs of ID and income. Many lenders are quite inflexible in what documentation they request, so be prepared to have to work to get everything in order.
- French lenders will not run a credit check on you like in the UK, but they will carefully assess your income and outgoings. They will review your tax returns, pay slips, bank statements, employers’ letters and rental agreements as well as any previous mortgage statements.
- Fees can add up quickly. When comparing different mortgage options, it’s important to look at the total cost to you. For example, most lenders will require you to take out life insurance with them. This life insurance can equate to 25% of your total cost. Even if one lender offers you excellent rates, if their life insurance costs are much higher, you could be worse off than choosing a lender with less competitive rates.
- Not all lenders will carry out a valuation or a survey. It’s up to the borrower to investigate any particular issues with the property, like structural issues, damp, or dodgy wiring. Further to this - make sure that when you instruct your surveyor, you check on the boundaries of the property to avoid any disputes further down the line.
- You will need a French bank account to secure a mortgage, with the Releve D’identite Bancaire (simply put: the details of your bank account).
- Mortgages in France have an eleven day “cooling off period”. This means that even once the bank has sent you the paperwork to complete, you must wait eleven days before you can return the application.
How much will I be able to borrow?
How much you can borrow will depend on your personal circumstances (as always). In general, you will need at least a 15% deposit and be able to borrow up to 85% of the value of the property. It’s more common to need a 20% deposit and to borrow 80%.
The maximum term you can borrow for is 25 years, although again, this is the exception and not the rule. 20 years is the most common term.
If you already have a mortgaged UK property, or any other outstanding debts such as credit cards or loans, these outgoings will be taken into account when the lender reviews your affordability.
Mortgage rates are not set in stone - you may be able to negotiate on rates or fees. If you don’t know where to start with this, your broker will be able to negotiate on your behalf (and direct you to the lenders most likely to negotiate with you).
What interest rates can I expect?
Like in the UK, it’s common to fix your interest rates for a period. Variable rate products are available, and they typically track around 1%-3% above the Euribor rate. One advantage of the French mortgage market is that early repayment charges are low (typically below 1%) if you wish to pay off your mortgage earlier.
Warning!
UK borrowers do not need to limit themselves to approaching lenders who specialise in international buyers. These services may be appealing, but you may not secure the best deal. You may be happy to pay a premium for the convenience and smooth sailing of the purchase process, but if your priority is securing the best financial option, choose a broker who will approach all lenders for you.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
