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
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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