French mortgage rates on the rise despite ECB hold

After meeting today with two of France’s leading mortgage providers, Athena Mortgages is now aware that the average margins for French tracker rates are about to increase slightly, whilst fixed rates in France are also about to rise. This increase of approximately 7% does have an impact on the bottom line for investment properties such as new build ski leasebacks as well as for classic second home properties. As we have some influence with our partner banks owing to the fact that so we have provided half of their total volume for the year, we have secured some preferential conditions and packages. These exclusive French mortgage deals will delay the rises for our clients for a period of 2 months and so we recommend you contact us very soon if you are considering a mortgage in France for an investment property.

These increases in the average french bank margins takes place against the back drop of the latest hold for the European Central Bank base rate which remains at 1%, which should have meant stability in the rates. However, the debt problems in Greece and the long term implications of the necessary cuts and the financial support which may have to be offered by the EU to Greece means that international investors have sold positions in Euros preferring to buy US dollars. This has weakened the Euro by 1% against the dollar which is now at a 7 month high against a basket of currencies. The effects of the weaker Euro could be beneficial in the longer term as exports will pick up again, creating more jobs but in the shorter term it makes a European foreign currency bank debt more expensive, which could be reason for the increase in bank margins.

Before Christmas I wrote on this blog that I thought we would see increased competition among the French banks for French mortgages and that I anticipated a reduction in the margins from the major lenders looking to secure the good quality borrowers in this market ( I now think this will happen in early 2011). However, the pressure on the Euro economy, especially countries like Greece, Spain and Ireland who have major cuts to make in spending is reducing the demand and price for oil which therefore makes the medium outlook for sustained inflation above 2% unlikely. In this situation some of the major banks seem to be looking to raise their margins again to compensate for the fact that central bank interest rate rises may be further away than we think and so opting to increase their balance sheets with higher margins with which they may be able to offer higher interest rates to savers thus attracting more capital.

This trend for higher increases is putting pressure on many investors who are looking to lock in the lower rates and other investment advantages while they can before many of the increases and changes take place in mid April. So if you are looking new build properties or a French leaseback property mortgage it would certainly be wise to call us and to take advantage of some of the conditions we have negotiated which include rates from 2.4% with 3 years of interest only possible.

On our website, you can find some of our best French mortgage rates with best buy tables and a French mortgage calculator but there is nothing better than giving us a call especially if you have a project in mind which is completing this year.

Athena Mortgages London +44 (0) 207 471 4515 Athena Mortgages Paris +33 (0) 1 53 63 12 72

The worst day of the year is behind us...

It is widely accepted that the last Monday in January is when most of us feel at an all time low for the year as memories of Christmas fade, the gloom gets to us (if we are in the northern hemisphere) and anxiety and depression can set in for all sorts of reasons not least the fact that New Years’ resolutions have already been broken. However, from our perspective, here at Athena Mortgages, all in fact seems to be brightening up and we are looking forward to another excellent year.

The general feeling from many of our partners seems to be positive with many having closed many sales of French property over the festive period and continued the habit into the New Year. Across the board there seems to be a feeling of cautious optimism for the coming year with many plans now starting to bear fruit. The new organization of Athena Mortgages is now almost complete, after careful analysis we are now confident that our new processes will allow us to offer even better customer service by improving our response times in all areas of the French mortgage process in spite of the rising number of enquiries.

There is no bad news from the French mortgage market to report, rates are still on hold and seem likely to stay that way. Average property prices in France recorded a small drop in December which will keep vendors on their toes maintaining the good buying conditions across France. As always you can find the most up to date rates for mortgages in France on our website. Our new look website boasts a French mortgage calculator and interactive best buys table for second home, leaseback, buy to let, equity release and refinancing mortgages in France.

Poll predicts no rise in ECB rates until Q4

The view that interest rates for mortgages in France will remain low for the next year at least, continues to be borne out as a recent poll by Reuters of 80 economists has predicted that there will be no increase in the European Central Bank interest rates until the fourth quarter of 2010. With this news, the outlook for rates for financing in France remains good with rates generally predicted to only rise to 2% in 2011. As we step out of the shadows of 2009 and into the uncertain light of 2010, there is a great opportunity for those with the confidence to search out and negotiate price reductions for the bargain property currently available in France. So if you have been planning to buy a property in France or you are looking for a good long term investment, The borrowing conditions have not been this good for a generation.

Our view of the market shows us many types of property in France selling well, with a particular seasonal interest in Alpine locations and good investment deals with little money down and more or less cash flow positive under the French leaseback scheme. We have continued to receive a steady flow of interested clients looking for the best rates for acquisition and equity release mortgages alike over the festive period and into the New Year. So far, only one of the French banks has show its hand with regard to their rates for January and this so far has been for a small raise. Overall, the market for French property is starting to get going as some confidence returns; the France Show at Earls Court, London, this weekend should provide a good indication of just how confident the largest population of non-resident buyers of French property, the English, are becoming.

For a view of the current French mortgage rates available, please visit our recently re-launched website which focuses exclusively on mortgages in France.

Happy New Year from all the team at Athena Mortgages

10 year low for EU Central Bank rates

The EU central bank today confirmed that it was keeping its rates steady at 1.00%. This rate has been in effect since May of this year and continues to provide support for French property prices which remain stable according to the November press release from the FNAIM, the national Federation of estate agents in France. Average property prices rose in October by 0.6% and the overall drop in the average price of French apartments and houses is now reckoned at 5% for the year. With the Eurozone and France both now having exited the recession and showing signs of growth the outlook is positive for rates for mortgages in France and French property prices.

Although the news today came as no surprise, it is interesting to see that the general consensus for the way in which the French mortgage market and French property market will evolve is currently going to plan. If we look across the water to the US figures released today from a survey by Freddie Mac, the giant US government owned mortgage syndication company, indicated that 30 year fixed rate mortgages are now at their lowest level for 10 years. The rates for these mortgages have been falling for the last 5 weeks and now stand 4.71% down from 4.78% just one week ago according to Reuters news agency. Variable French mortgage interest rates are very low starting at just 2.3% and with the rates for long term loans also decreasing, now standing at 4.5% for a 30 year fixed rate in France at 80% LTV, showing that the money from the economic stimulus packages is definitely filtering into the global economy with many institutions now ready to borrow huge sums and to lend this money on into a rising market over the next 20 years.

So what does this all mean for the outlook for the French property market? Well, it would seem that prices will inevitably start rising as the money from the quantitative easing finds its way into the hands of those who are capable of obtain a mortgage in France. The timing and scale of the increases depends on the speed at which the economy takes off again but certainly within 5 years the increases in French property prices would realistically seem to be substantial providing the period of unconfident growth we are entering only lasts for 3 years. The effects of inflation, energy prices, unemployment rates and of course confidence will all have their parts to play over the coming 12 months making this a very interesting time for both French property and French mortgage markets.

EU inflation and French mortgages

With the news today that inflation has return to the Eurozone, what does this mean for the outlook for interest rates for French mortgages? The increase in consumer prices for the month of November marks the end of a five month cycle of deflation across the European economic area. The 0.6% rise was driven largely by rises in energy prices which are common at this time of year but exacerbated by the returning trend for oil speculation with traders finding it cheaper to store the oil and to take orders for delivery in six months time. This practice serves to drive up the prices but reducing the supply in the face of increasing demand as oil consuming companies look to hedge against rising costs.

This increase in inflation will increase pressure of the ECB to raise the rates for French mortgages but the pressure to not halt the shoots of growth in the economy with jobless figures still rising will mean that in the short term interest rate rises are still quite unlikely. In the longer term inflation and growth will take a firmer hold, bringing increases in French property prices as investors continue to move out of cash and into assets such as gold and property to avoid the erosion of their net position due to rising inflation. However, with the return of confidence to the market we are predicting in early 2010 and the activity in the market for ski properties we may actually see French lenders starting to decrease their margins slightly and thus their rates for French mortgages will fall in the short term, in order to remain competitive.

If you are looking to purchase in France in the coming months then it would be a good idea to speak to your broker for an up to date view on the timings of any of the rate decreases and when the each individual French bank publishes their rates in order to get the best deal. Alternatively, you can view our current best buys for mortgages in France.

Outlook good for low mortgage rates in France

With the reaction on the FTSE today to Mervyn King’s announcement that mortgages rates look certain to stay low in the UK despite a coming spike in inflation, the outlook for low mortgage rates in France. Fortis bank announced today that it was selling bonds covered by ECB collateral bring liquidity to the market again. Two other major French banks also announced that they were also using mortgage backed collateral to raise further finance into an increasingly competitive market for mortgages in France. We have noticed several banks dropping the margins over the Euribor for variable rate mortgages in France in the past few months with many lenders now back to margins below 2% having dropped the margins by 20% or more.

Low rates and the availability of up 100% finance for French home loans provide those with good levels of income to secure a French property despite the strength of the Euro. We have seen continued growth in the numbers of enquiries over the last month with a further increase of 15% in the number of people applying for a mortgage in France through Athena Mortgages. We can offer a good snapshot on potential new loan offers and rates from the major and niche lenders in France. Our service levels are excellent and our brokers professional and friendly, helping all those who apply with us an excellent package for properties in France. The best way to find out what is happening in the France mortgage market is to talk to one of our brokers and for those looking for the current best buys for French mortgages can find them here. Best buys for Mortgages in France for leasebacks, second homes, buy to lets and equity release.

French mortgage best buys for mortgages in France

Finding the best buys for mortgages in France can take some time. Is it best to go for a bank near to the location you are buying in or is it better to search for the best buys with a French mortgage broker? The answer probably is a combination and depends partly on the time you have available to commit to finding the best buy and the level of you spoken and written French. The main problem with dealing with local French banks is that the majority are not equipped to deal with an English speaking customer, just as you might say the local branch of Bristol and West does not have multi-lingual speaking customer services to service buyers from France or Russia. By comparison a French mortgage broker with the right connections can provide the services of personal French banker who speaks English for the princely sum of €44 per year as well as handling all the necessary paper work for you to obtain the French mortgage you have selected.

Athena Mortgages offers a free best buys comparison table which helps you to see at a glance some of the best buys for second home mortgages in France, best buys for leaseback mortgages in France, best buys for buy to let mortgages in France and best buys for equity release mortgages in France. This comparison table offers much more than the usual short synopsis found on other sites at it includes notes on the how the mortgage product works and early repayment charges meaning you can review some of the best options fully. The table can be found here at French mortgage best buys for mortgages in France.