Most people who buy through us require or prefer to take a French mortgage to finance part of their property purchase. Rates at the moment can be fixed around 2% for 20 years on a capital repayment basis. These are the best rates since WW2 and mean that even on a very conservative estimate of rental income you are virtually guaranteed to at least cover the interest payments from your rental income and should make a significant profit on the difference. France is one of the few countries in the world that offer fixed mortgage rates over such a long period. As such most purchasers choose this option for their security which is one of the many reasons France has one of the most stable property markets in the world. Avecoeur has partnerships with all the major banks in France and some smaller ones and are therefore able to find the best mortgage to suit the purchaser’s personal financial situation and requirements. Our bilingual staff also ensures that communication is easy and quick which is not always evident if trying to secure your finance directly with French banks or via French only speaking mortgage brokers in France. Below are a few of the mortgage products available:
Variable Rate mortgage:
This is based on the Euribor 1, 3, 6 or 12 month rate with a fixed margin for the bank. Like a tracker mortgage in the UK this rate can go up or down and often you will be given the option to have this rate capped - the wider the range of capping the cheaper the mortgage will be. For example a rate which is capped at +/- 1% will be more expensive than one which is capped at +/-2% as it gives more security and less volatility for the client.
Fixed Rate mortgage:
The rate of interest is fixed for a period of 10, 15, 20 or 25 years so that the amount that you pay each month stays the same. The longer the length of the fixed term of the mortgage the higher the rate will be.
Variable Length mortgage:
Some banks also offer a variable length mortgage so that your monthly repayments are fixed but the length of your mortgage increases or decreases as the interest rate goes up or down. In this way you can benefit from the more competitive variable interest rates whilst also keeping your monthly payments the same.
Interest Only mortgages:
Most lenders tend to only offer capital repayment mortgages as this is the most widely used in France however there are some banks that will offer interest only mortgages. The only thing you need to bear in mind is that the interest rate charged on interest only mortgages tends to be a little higher than the equivalent capital repayment mortgage and often require you to put a certain amount of money aside on a special savings account or have enough assets to cover the loan amount.