French mortgage rates in 2011

In August 2010 the TEC 10 index, which is used to price fix long term loans in France, reached its lowest ever level at 2.53%, and in October a report published in France revealed the average rate for mortgages in France was at its lowest level since the Second World War. The average rate in October 2010 stood at 3.30% which, when you consider the average French loan term is more than 15 years, shows just how attractive rates are. The Euribor 3 month, which is the index used to price billions of Euros of variable interest rate non-resident mortgages, has risen 30% in the last 6 months and now stands at 1.030%, just above the normal pre-crisis range and margin of the benchmark European Central bank rate of 1%.

At the time of writing (December 2010) the Tec 10 has risen 20% to 3.12% since the end of August 2010, perhaps heralding the beginning of the end of these historically low interest rates. You can still get a 25-year fixed rate at 3.8% or 3.5% over 15 years at 80% of the purchase price, which in UK terms is still impressive. Tracker mortgages on the 3 month Euribor for an 80% mortgage start at 2.35% on a 25-year term. At 100% LTV you can secure a rate of 3.15% which can never increase beyond 5.15% over a 25-year period.

So where next for rates in 2011? We may see some fluctuation in the Euribor but in general any increases to mortgage rates in 2011 are likely to be small. The majority view is that we may not see the European Central Bank base rate increase until Q4 2011 and perhaps not until late 2012. Austerity measures across Europe will bite, reducing inflation and growth, meaning there is little need to raise rates. So thoughts turn to the currency element of the purchase in France. We can expect widespread austerity measures – including reductions in government spending and tax increases – implemented across Europe next year. These measures will bring about an increase in the numbers of unemployed, which is a recipe for lower growth and inflation. And with the trend for banks to be rebuilding their balance sheets with more conservative lending to businesses, and thus reducing the cash investment to get the economy moving again, we can see why interest rates, which increase when the economy is growing, are not expected to rise much in 2011.

The Pound has fallen 30% over the past three years. This is largely due to our structural deficit, which is one of the largest in Europe. The other factor is the irrational state of the market, previously, where there was too much cash chasing too few assets. This bubble also inflated Sterling to the point where what seems like a 30% drop is in fact a pretty good valuation which may be with us for some time.

The UK outlook is for low growth as our housing market is still unaffordable for many, compounded by a lack of lending from the UK banks. The Pound has recovered from near parity with the Euro in 2009 and is now hovering around the 1.20 mark, based on confidence from the market in the UK Government’s spending plans. In Europe the increasing deficit problems and lack of investor confidence in Portugal, Greece, Ireland and Spain is a worry for many. The ECB is buying bonds from these countries and is managing well to reduce the amount of money the ‘PIGS’ have to pay to borrow on the international market for the spending plans. All things being equal, we should see a stable year between this currency pair with the Pound continuing to trade around the €1.20 mark. As 60% of UK trade is with the EU, it is likely that we will fall and rise together. To keep up to date with mortgage news in France, just visit the news section on our site or register for our newsletter.

Best wishes for the festive season and New Year.

The athenamortgages.com Team

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Prezi on French mortgage market trends for 2011

How we help and the historic opportunity on Prezi

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FRENCH FIXED RATE MORTGAGES HIT HISTORIC LOWS: ATHENAMORTGAGES.COM OFFERS 20-YEAR FIX FROM 3.45%

London, August 25, 2010 – As French fixed rate mortgages hit historic lows, French mortgage specialist Athenamortgages.com launches its lowest-ever fixed rate deals, with 15-year fixed rates from 3.30%, 20-year fixed rates from 3.45%, and 25-year fixed rates from 3.60% (all at 80% LTV).

Athenamortgages.com has seen a sharp rise in the number of enquiries in August from UK buyers looking to take advantage of the cheap fixed rate deals on offer at the moment from French lenders, and September promises to be even better as fixed rates are predicted to fall even further.

The reason for these record low fixed rates has been the downward pressure on the TEC10 index, due to a combination of a low inflation environment and investors seeking the safe haven of government bonds. The TEC10 index is the benchmark index against which French fixed rate mortgages are calculated.

The TEC10 index has been steadily falling since the start of the year and has consistently been below 3% during August, reaching an all-time low of 2.60% yesterday (Tuesday, 24th August). This compares to 3.65% on 6th January 2010.

John Busby, director, Athenamortgages.com, comments: “France is in a historically low interest rate environment at the moment with average fixed rate mortgages at levels not seen since the end of 2005. At that time though the TEC10 index was well above 3%. Now with the TEC10 at 2.60% and predicted to fall even further in the coming weeks, average fixed rates could well hit record low levels in September.

“With fixed rates falling, we have seen a noticeable shift in the types of mortgages people are ringing to discuss. Fixed rates are now the overwhelming choice amongst buyers - this is not just because of the rate drop, its also because the margin between the average fixed and variable mortgage has narrowed since May, making fixed rate deals even more attractive.

“For UK investors looking for a safe, long-term investment, second home buyers or people looking to relocate to France, there has never been a better time to purchase French property. Borrowing conditions are as good as they’ve ever been, and with property prices still well below their peak, UK buyers have a great opportunity to pick up a property at rock-bottom prices and fix monthly payments for 20 plus years at fantastic rates.”

The following table gives examples of the best fixed rate deals currently available through Athenamortgages.com to UK investors looking to purchase in France:-

* For the one and five-year fixed rate deals, the rate becomes variable after the fixed rate period ends, but cannot increase by more than 1% from the initial interest rate. The rates in the table are for indicative purposes only. Rates may vary depending on the loan amount, location of the property and the profile of the client.

About TEC10

The TEC10 is the benchmark index against which French fixed rates are calculated. The index is calculated daily on long term bond yield curves and published by the French treasury.

Athena Mortgages

Athena Mortgages is the leading multilingual French mortgage broker for international buyers seeking French property finance and loans. Focusing exclusively on mortgages in France, Athena Mortgages can provide expert knowledge of the current French mortgage best buys for second homes, investment property finance, remortgage and equity release loans.

www.athenamortgages.com

Telephone London +44 (0) 207 471 4515

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Euro mortgage currency watch from MoneyCorp

After six months in the wilderness the euro has come back with a bang. Since early June it has added 11 cents against the US dollar, a rebound of more than 9%. For the first half of the year investors fretted about the debt problems of Greece and the possibility that contagion could affect Spain and Portugal. They didn't like the euro so they liked the dollar. Now, they worry that the US economy is running out of steam, even that the president will feel the need for yet more expensive stimulus measures. They don't like the dollar so they like the euro. It is the lesser of two evils.

The pre-and post-election rally did a good job for sterling, as did the new chancellor's brutal budget. Britain's AAA credit rating is no longer at risk and the pound is once again a currency that investors can buy without embarrassment. Many of them reduced their speculative short positions, giving the pound a post-budget boost. That does not mean they feel compelled to fill their boots with sterling. Some fear Mr Osborne's austerity plan could derail the recovery if it leads to large numbers of job losses in the public sector.

The euro's immediate future will depend on the reaction to the results of the 'stress test' imposed by the EU on 91 of Euroland's biggest banks. It has tested their capital structures to see if they could survive another financial crisis. Failure would mean the need for a capital injection. Brussels hopes the test will restore confidence in European financial institutions and revive interbank lending to normal levels. But the exercise is not without risk to the euro. If everyone passes with flying colours, will the results be credible or will the test be dismissed as a cynical piece of window-dressing?

For the latest euro mortgage rates please vist out website athenamortgages.com

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Mortgages in France -Why buy French property now?

Obtaining French mortgage finance for a property in France can sometimes be a daunting process as the French banks generally demand more documentation to support an application than their UK counterparts. Add the cultural and language barriers and somehow just releasing equity in the UK starts to seem like a good idea. Whilst the pound/euro exchange rate has certainly improved over the last few weeks to €1.20 to the pound in anticipation of the UK getting its finances in order, it is still 20% down on where it was a couple of years ago and in effect by paying now in pounds the price is effectively 20% higher today. Not so if you take out a euro denominated French mortgage. By keeping the finance and the purchase in the same currency the monthly mortgage payments might be higher than they would be at €1.45 to the pound but the historically low interest rates more than make up for this. The 3 month Euribor the rate upon which most variable rate mortgages in France are pegged now stands at 0.74%, + an average margin of 1.5% gives an average variable rate of 2.3%.

The whole process of getting a French mortgage can be made simple through the use of a broker. A good French mortgage broker will assess your situation and plans for your intended purchase and provide a selection of loans that will meet your criteria. At athenamortgages.com, we generally layout all the purchase costs and mortgage payments in a time line so as to provide a clear comparison between the different loans available. These comparative simulations are made after a consultation with the prospective borrower comparing up to 3 different products side by side. Currently we can offer up to 100% of the property price for a second home or investment property in France which means the exchange rate concerns are minimized with only the 8% stamp duty and taxes to pay. This loan will typically be on a repayment basis over 25 years at a rate of 3.8% capped at 4.8%. Loans with a fixed rate of 4.3% for 25 years are also available at 90% of the purchase price.

There are many good reasons why buying French property now is a good idea. For more information on the current best rates for mortgages in France please visit our best buy tables found at www.athenamortgages.com

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The effect of the UK budget on the French property and mortgage market

George Osborne’s budget today outlined some major changes to UK taxation but what effect if any will this have on the market for French property from UK buyers? The headline changes from the speech are the rises in VAT to 20% and the increase in capital gains tax to 28%. At first glance both of this rises appear to reduce the attractiveness of making investments as cash flow is effected by the rise in VAT and the long term profit of owning a second property in France is reduced by the increase in CGT.

Listening to Harriet Harman’s appraisal of the budget as being unfair on those with the lowest incomes, as proportionally speaking the increase in VAT will hit there hardest, we can glean that it some way this budget is beneficial to those on higher incomes. In many ways this is right, the effect of the intended reduction of the deficit over the term of this parliament will be of benefit to those on higher incomes, as in fact it will eventually be for everyone. With regard to the French property market, usually the preserve of those on higher incomes who are least affected proportionally by the increase to VAT, the effect of a Britain living within its means will be a stronger pound, and therefore lower costs for mortgage payments, whether the payments are regular or lump sum.

The rise in CGT may deter some UK based buyers to the French property market, these same buyers being deterred in fact from almost any form of investment, if they are overly price sensitive. Just a few years ago the rate for CGT stood at 40% (with some additional taper relief benefits) so in fact the rise could have been larger but seems to have been optimised in terms of ensuring the balance of payments to the treasury increases. As the majority of investors in France look for the long term, I do not believe the rise in CGT will have much of a noticeable effect. In fact I believe that the certainty brought about by the budget will in fact allow more people to make decisions which had been delayed pending the budget.

Overall the picture looks good for the UK and the outlook for continued excellent conditions for buying French property with mortgages in France.

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Fixed rate mortgages in France vs UK.

Mortgage interest rates in France and across Europe are at an historic low currently which means that mortgage interest rates can only really go in one direction now. Whilst borrowers in the UK languish under the implied threat of interest rate rises owing to an UK inflation rate that is at the highest point since August 2008, the majority of their French counterparts can continue unconcerned thanks to their fixed rate mortgage in France which has a fixed rate for the term. Indeed, 70%-80% of current French mortgage holders have long term fixed rates of 15-25 years and with variable rates generally being capped and monthly payments on variable mortgages generally not allowed to increase by more than 10% per year, it is easy to see why the French are relaxed. By comparison, British borrowers live under the sword of Damocles as the majority, 70%-80% have fixed rates which are not longer than 5 years which means that there is always a chance of coming off a fixed rate into an environment of higher rates and thus substantially higher mortgage payments.

In France, the general trend is to have one mortgage to pay for a property rather than remortgaging every few years as borrowers do in the UK. The level of demand drives for fixed rate mortgages in France drives exceptionally good value deals not see in the UK. For example, at the time of writing, a French resident might fix for 25 years at a rate of 3.76%. “But that must be for a low level of loan to value!” I hear you cry. In fact this rate can be procured for 100% loan to value which makes the 5 year fix, currently available from the Co-op at 3.99% at only 75% loan to value, seem wildly overpriced. Even non residents can access a fixed rate mortgage in France with a better rate than that. Delving into the reasons for this price disparity, there are technical reasons relating to the UK banks purchases of covered bonds according to the Miles review commissioned by Gordon Brown but the main cause is the extreme price sensitivity of UK house buyers, looking at short term gain rather than long term value.

UK and Internationals buyers of French property can benefit from fixed rate mortgages in France with 4.3% fixed over 25 years at 90% loan to value being one of the most attractive deals. Unfortunately, French banks do not take charges on UK property, otherwise I am sure many borrowers in the UK would be looking to fix for the long term.

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Interest rate and exchange rate outlook from Moneycorp

One of the first letters received by Britain's new chancellor came from Mervyn King, governor of the Bank of England and guardian of the nation's 2% inflation target. The governor must write an open letter of explanation and intent if inflation strays beyond a range of 1% - 3%. In April it was 3.7% so he put pen to paper. Two years ago or more the solution would have been simple; raise interest rates to dampen demand and bring inflation back into line. In the modern post-financial-crisis world with political uncertainty at home, fiscal anarchy across the Channel and low levels of economic growth in developed countries the decision looks less straightforward, especially as the Bank sees this inflation upturn as only a temporary blip.

Although inflationary pressures in Euroland are less severe - 1.5% in the year to April as opposed to Britain's 3.7% - the legacy of the hardline pre-euro Bundesbank is to make its ideological successor, the European Central Bank, especially intolerant of rising prices. In its 11-year history the ECB has been tough on inflation, tough on expectations of inflation. It was two months after the Bank of England's policy rate bottomed at 0.5% in March last year that the ECB reached its own low point at 1.0%. And while the Bank of England was spending £200 billion buying up UK government bonds last year in order to relax monetary policy with 'quantitative easing', the ECB shied away from anything that smacked of printing money.

During the early part of this year the sensation was that, with the recession behind them and economic growth on the rebound, both the BoE and the ECB were girding their loins in preparation for bringing interest rates back up to what they consider normal levels. Europe's response to the Greek debt crisis is changing that perception. After half a dozen false starts the EU put together in May a monster €750 billion rescue plan not just for Greece but for any other country that might find itself in the same position (think Portugal, Spain, Italy). The ECB has had to soak up Greek government bonds that nobody else wants. Governments in Ireland, Italy, Spain, Portugal and, of course, Greece have imposed austerity measures involving public spending and wage cuts as well as higher (or at least better-enforced) taxes.

There can be no doubt that the severity of the measures will have a depressing effect on the economies of the countries directly involved. But it will also affect countries with whom they do (or did do) business. That means not just their neighbours in Europe but the emerging markets and commodity-producers that supply them with zinc, rubber, motorbikes and flat screen TVs. The global recovery is suddenly no longer inevitable: the risk is of a return to global recession. What worries investors now is the possibility of Global Financial Crisis II: This time it's personal.

As long as that concern persists it is unlikely that central banks in Europe - or anywhere else - will rush to tighten the screw with higher interest rates, especially as banks in the private sector are already doing that. For example, it is a matter of supreme indifference to UK consumers whether base rates are 0.5% or 1.5% when they are paying an average of 15% to service their overdraft.

Because of this it is probably fair to expect official interest rates in Britain and Euroland to remain at their current low levels into next year. There are risks to the scenario, not least the danger that inflation could re-emerge in Euroland or refuse to subside in Britain. But with half the continent held down by austerity budgets and reduced incomes it is not easy to see what might possess manufacturers and retailers to bump up their prices.

With steady-as-you-go for interest rates and no horrible economic or political surprises there would be reason to think the sterling/euro exchange rate could remain within the €1.09 - €1.19 range that it has occupied for six months. But horrible surprises have become the rule rather than the exception lately and there is no reason to suppose the show's over. If another Club Med country joins Greece in the queue for handouts the euro will suffer. If Britain's untested coalition government fumbles the task of sorting out the deficit the pound will have to take it on the chin. To paraphrase the opening line of the 1960s kids' series 'Stingray'; 'Anything can happen in the next half year!

French mortgage interest rates, look set to stay put where they are for the time being. For more information on the current best deals please call Athena Mortgages on +44207 471 4513.

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Rates for French remortgages and French equity release mortgage rates

Remortgaging or releasing equity from your property in France can be an interesting as the process is quite unusual. There are a variety of reasons why refinancing an existing mortgage in France is not a common occurrence and subject to different rules and procedures from those in the UK. One reason is the existence of mortgage registration tax in France of approximately 1.5% when you bought your property. Every time the notary registers a charge against a property there are some transaction fees and taxes, which in the case of a French remortgage are called ‘frais de main levée’, literally cost to take the hand off, and then some fees to register the new mortgage amount for the new bank. Overall the fees for remortgaging your French property will be in the region of 2.5%, which depending on the current rate you are paying on your mortgage may be attractive.

Given the popularity of fixed rate mortgages in France, most people fixing for 20-25 years, it is easy to see why the market to remortgage properties in France is not that active, as most people are comfortable with the rate they have chosen. In addition, almost all fixed rate mortgages in France have an exit penalty of up to 3% or 6 months interest (half the interest rate on the mortgage) making the overall cost of the remortgage up to 5% for those on a fixed rate. Overall we can see that the cost of remortgaging may make the savings on the monthly payment not all that worthwhile for those on a fixed rate whilst those on variable rates can breathe more easily as there are generally no exit penalties or early repayment penalties on variable rate mortgages in France.

For those seeking to refinance a loan in France or to remortgage a ‘capital and interest’ loan, switching to interest only, the outlook currently is not favourable. Only those borrowers with the best profiles will be able to succeed in convincing a bank of the need to do this. The news coming out of most French banks is that such requests will be refused as lending policy seems to have changed against offering interest only loans for all types of mortgages in France not just French remortgages.

On the brighter side, those with large amounts of equity in their property in France or those who bought their property 7-10 years ago may find that with rates so low it may well be worth incurring the costs of remortgaging or releasing equity in France. The euro remains fairly strong against many currencies, though not the Aussie or US dollars, and so the benefits of transferring a large amount of equity home to places like the UK may well make sense at today’s exchange rate. For anyone with a rate over 6% it also makes sense to seek a French remortgage as you can certainly make the money you outlay in just a few years.

In terms of the documentation required to remortgage, you will have to provide proof of income, identity and your last three months bank statements together with the deeds of the property and the original mortgage offer. If you would like further information on French remortgages or equity release to see the current best rates for remortgages and equity release mortgages in France just pay us a visit or call us on +44207 471 4513.

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French mortgage rates 2010-2011: What next?

French mortgage rates have been relatively stable now for over a year. The only changes in the overall rates coming from changes in bank margins or if banks change their initial rate, also known as a teaser rate. So with all the turmoil in France over the huge deficit in Greece, what is the outlook for rates for mortgages in France?

French mortgage rates are based on the rate set by the European central bank which currently stands at 1%. As the EU only has one interest rate for all 16 member states, it cannot adjust the rate to help those countries that are worse off. So when considering which way the rates for mortgages in France will go, we have to look at what is happening across the EU.

The main factor affecting the ECB rate from which we get the current French mortgage rates, is the situation in Greece and the wider social problems of unemployment and rising household debt. Although the markets responded well initially to the One Trillion Euro bailout plan agreed by EU finance ministers, it was French president Nicholas Sarkozy apparently threatened to take France our of the Euro if the deal was not agreed, there is still some doubt over Greece’s ability to push through the austerity measures necessary to reduce their growing deficit and to reduce the interest rate payable on their Government bonds. The fact that some of the guarantee is coming from Portugal, Italy and Spain, who may also have problems reducing their own deficits, means there is some cause for concern, as their economies are not out of the woods yet. All this brings the Euro to an 18 month low against the Dollar today as concern spreads about the prospects for economic recovery. With the inflation rate predicted to stay low throughout 2010 and 2011, kept in check by a rising French unemployment rates, a pattern replicated the rest of Europe, the prospects for any large increases in the ECB main refinancing rate, and thus the interest rates for French mortgages, seem small for the next 18 months at least.

For a view of the current best buys and French mortgage rates please vist our website.

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French Mortgage calculator

Using a French mortgage calculator can give you a good understanding upfront of the likely cost of your mortgage in France. One question I have whenever am looking at calculators for mortgages in other countries is what is the likely rate going to be and what percentage of the property price am I going to be able to borrow. This is why on our French mortgage calculator page offers a handy idea of what the French mortgage best buys are for a range of purchase options from a classic second home mortgage to French leasebacks and Equity release options. With this information it is easier to get a top level understanding of what the likely loan payments will be on the mortgage and can help to inform you in your search for the right property and the right finance.

However, French mortgage calculators, like all mortgage calculators are offering figures in a vacuum and it is always necessary to find out if you will be able to qualify for the loan amount you would like to borrow. In order to calculate what size French mortgage you would be able to borrow, French banks apply an affordability calculation. This is based on your gross salary, you out goings for existing loan payments and any existing rental income. Take a calculator, calculate your gross annual salary on a monthly basis and then multiply this figure by .33. This will give you the amount the French banks consider you have available to spend on borrowings and loan payments on a monthly basis. From this figure you should deduct all you current monthly outgoings for loan payments and then ad 80% of any existing or future rental income you may get (N.B. French banks do not take seasonal income from holiday lets into consideration in their calculations. If you are planning to buy a property and to rent it out on an ad hoc basis, please get in touch with one of our consultants who may be able to get some of this income taken into account).

You should now have a figure which will be a good approximation of how much the French bank calculates you have to spend on a monthly payment for a French mortgage. The best way to confirm you situation is of course to speak with a professional broker who understands all the different ways French banks calculate the affordability ratio and how to get the best loan for you. Athena Mortgages are a specialist French mortgage broker and so we can offer you a fast decision in principle, telling you not only how much you can borrow in France but also send you a bespoke simulation comparing up to three mortgages side by side at a time, detailing purchase timelines, the dates when each sum will be required and also the documents required to apply for each loan. An overview of the current best French mortgages rates and our French mortgage calculator is available on our site and our consultants are available on +44 207 471 4515.

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French mortgage rates

When looking on the internet for the latest French mortgage rates, there are many sites offering this service. The temptation for most sites is to only give the lowest rates, perhaps for short durations such as fifteen years, which look attractive on the page, but leave some people disappointed when the realization hits that in fact the rate for the duration they are looking for is in fact much higher. In fairness to many of these sites the average cost per month for a €100,000 or €250,000 mortgage is also often displayed. However, many French banks still operate with an very low initial rate designed to attract customers, which distorts the figures for comparison and also the amount of the monthly payment. This initial rate or ‘taux initiale’ is usually fixed for 3 months, reverting afterwards to the 3 month Euribor + a margin. So when comparing the current rates for French mortgages, it is important compare the index the rates is based on and the subsequent margin after the initial period.

The French mortgage rates found on the best buy comparison tables on our website provide this information to the prospective borrower upfront, in order that all the information is provided clearly for the comparison to take place. There is also a handy French mortgage calculator which allows you to calculate the amount you would pay per month for each different mortgage. Unlike many other sites, there are French mortgage rates for French leaseback mortgages, French second home mortgages, French buy to let and French equity release loans to be found on our website. In addition, you can find comment on the likely next movements for mortgage rates in France to help you to

Now all this is very useful when research which broker can offer you the current best French mortgage rates for mortgages in France but are there any brokers that offer a personalised comparison document? The answer is yes, and you guessed it….Athena mortgages are the ones providing this level of comparison on a regular basis. On most of our simulations, we will compare up to 3 mortgages in addition to outlining the purchase timeline and the amounts you will need to have ready at each stage of your purchase in France. So if you would like to receive a bespoke financial simulation, comparing three suitable mortgages, just call us on +44 207 471 4515 in London or visit click to visit our French mortgage comparison table page for the latest French mortgage rates.

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Life assurance for French mortgages set to change

The French mortgage market has received many plaudits recently as it is in relatively good shape compared to its ailing Anglo Saxon cousin. Once you look on the inside of the institutions and procedures of many of the banks you might be forgiven for thinking that you had been transported back to the mid 1980s. In recent times, competition has increased for mortgages in France for international buyers and in the past couple of years the first mass market interest only loans were introduced. Now further reform is on the cards as the French economic and finance minister, Christine Lagarde, continues her improvements to the regulatory landscape especially hidden bank charges.

Many international buyers of French property are surprised to find that life assurance is compulsory for all French mortgages. Even more surprising, is that the majority of French banks only allow applicants to use the life assurance recommended by the bank. However, this seems set to change with the Lagarde Reform which is currently going through the French legislative process. The main provision of this project lies in Article 17 which amends Article L. 312-9 of the Consumer Code as follows: "A lender may not refuse to secure another loan insurance contract when the contract has a level of security equivalent to the insurance contract that offers". Other amendments are also being proposed to strengthen consumer rights in this regard and the changes are expected to come into force on the 12th May 2010. This shake up should bring in more competition which is long overdue within the market.

The benefits of this reform will produce real cost savings over the life of the mortgage, with some insurance brokers saying that insurances costs pay go down by over 50 per cent. The minimum typical type of life assurance required for a mortgage in France is against death or total loss of mobility which generally costs €30 per month per €100,000 borrowed which for an average sized loan over 15 years would save over €5000. For more information or to sign up to our newsletter please visit www.athenamortgages.com

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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

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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.

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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

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