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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