about the Paris Mortgage Market
When securing an international mortgage, being prepared is crucial. We know language barriers can cause delays, however our multilingual team has a wealth of experience in securing international loans, and can help you navigate every aspect of the Paris property market.
It’s a great time to get a French mortgage because interest rates are currently at historic lows, and rates can be fixed on a long-term basis – up to 25 years – as banks compete for borrowers.
French retail banks will lend to 85% of the property’s value up to €5,000,000 and will allow the borrower to fix for up to 15 years at extremely low rates. They will however require detailed disclosure of all worldwide income and expenditure, and work on a debt serving ratio that cannot typically exceed 35% of a client’s income. Where this may be suitable for some borrowers, those looking for larger amounts, or those with more complex income or ownership structures, are better serviced by a range of international or private banks. These banks will assess eligibility based on both income and overall wealth, and will offer 5-10 year terms with rates starting from 1%. Private banks will typically require an asset pledge to sit alongside the mortgage of at least €1million, and in most cases between 20-50% of the mortgage amount. The banks will also consider equity release for the right purposes, and borrowing for older clients with the right wealth profile.
Key product highlights are as follows:
- For development, up to 100% finance of all costs to the project – engineering, architecture, all other development costs, notaire fees, with as low as 20% assets under management (AUM) required. This is important for mitigating wealth tax
- A portion of AUM requirements can come from loan capital
- Loans are not only available in Euros but other currencies as well
- A range of products available; fixed rate, variable, tracker[EURIBOR], capped, more complex products – i.e. fixed-variable hybrids
- Rates can be fixed at 1.5% on interest only or even below
- Purchase, development, refinance, equity release and bridging finance available
We can advise you on every aspect of every deal – be it tax, legal, foreign exchange and insurance. Our unique network of lenders means we have the relationships to be able to cater for any purchase, including specialist projects like leaseback properties and Vente en l’état futur d’achèvement (VEFA) contracts for off plan French property, in a timely and professional manner.
ABOUT THE PARIS PROPERTY MARKET
Paris is a popular choice of residence for a variety of reasons, not least its world class reputation for culture. The city has some of the most famous art galleries and museums in the world, including Le Louvre and Musée d’Orsay. Paris is also home to many of the world’s most iconic monuments, such as The Eiffel Tower, Sacrée-Coeur’, Notre-Dame Cathedral and Arc de Triomphe.
When buying French real estate in your personal name legal fees can be as high as 7.5% therefore our ability to connect you to trusted advisors who can better structure your property holdings is imperative. Given the overarching Wealth Tax in France, which can be as much as 1.5% depending on the value of your property per annum, structuring your borrowing to mitigate this is crucial.
When being considered for a French mortgage, your affordability will be assessed based on your entire financial profile, and you will also need to prove you have residual funds aside of your mortgage needs to service your day to day expenditure. Our specialist brokers can source preferential rates and terms that you won’t find going straight to the banks.