french alps property

25-year fixes still below 3.0% but interest-only harder to come by

The non-resident market for French mortgages is in fairly good shape in the run up to the busy ski property-buying season. Availability of capital is good for repayment mortgages and a 25 year fixed rate mortgage is still less than 3% on a capital and interest basis. Variable margins on French repayment mortgages are still in the region of 1.8% to 2% and essentially that is all that you are paying now as the 3-month euribor is below 0%.

Interest-only mortgages are slightly harder to come by at the moment as French banks are continuing to lower the risk levels in their portfolio of loans. And they are especially hard to come by if you have interest only mortgages in your portfolio. French banks are more sensitive to this and may seek to offer a repayment mortgage instead. If this is not acceptable then a loan with a Private bank may be the only option, though this will require assets under management to be placed with the bank. Careful preparation and negotiation is required to get this type of loan currently, especially for amounts over a million euros.

 

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JOHN LUKE BUSBY
Private Clients Director

French Mortgage Best Buys
Repayment
Rate Duration LTV Description
2.05% 20 years 80% Tracker mortgage 3m euribor +1.9%
2.25% 25 years 80% Tracker mortgage 3m euribor +2.0%
2.70% 25 years 85% Rate capped + 1.5% for 10 years
2.70% 20 years 80% Rate fixed for the term
3.00% 25 years 80% Rate fixed for the term
3.20% 25 years 85% Rate fixed for the term
Interest Only
2.30% 15 years 70% Tracker +1.95%
2.60% 15 years 75% Tracker 3 month Euribor +2.55%
3.30% 15 years 70% Fixed rate

France in the Press

 The eurozone needs a strong French economy
Economically speaking, France is not as French as it first seems but there is a desperate need for it to embrace some structural reforms
 French Economy Picks Up as Services & Manufacturing Strengthen
French economic output picked up in October to the fastest in four months as growth in manufacturing and services accelerated.
 How France’s New Tourism Strategy is Targeting The US Market
France is seeing an upturn in tourism from the United States and has plans to attract even more travelers with new infrastructure, more attractions, regional programs and special events over the next two to three years.

Area Guide

French-mortgage-watch-area-guide-Val-dIsere

Val d’Isere

At a glance, Val d’Isere’s history is much the same as any other resort, but its roots are slightly different to most and it also has huge scope for improvement.

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From the blog

Transaction of the month

This month we broke a new record! The average French mortgage loan takes around two months to go through, but this month’s French mortgage transaction of the month shows that it can actually happen in less than two weeks.

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Are the French becoming less stubborn over property prices?

A new barometer of price differentials continues to suggest that French vendors are relaxing their attitudes towards property prices.

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Paris Mayor to make another move against the city’s cold beds problem

When it comes to putting its accounts in balance, the mayor of Paris has big plans.

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New-housing demand slows in France, but confidence remains high

After six months of strong rebounds, the improving demand for new homes has suffered a setback in the third quarter with developers reporting a slight decline.

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Rate and indices

European Bank Base Rate and Euribor
The 3-month Euribor has remained unchanged recently, staying under 0%. The vast majority of all French mortgages use the 3-month Euribor as their reference index with a margin added on top. Current margins are in the region of 2% over the 3 month Euribor.

french private propety

Fixed rate mortgages: The TEC 10 index

The Tec 10 dropped this month and has been wavering around the 0.70%-0.80% mark. The TEC 10 index in France gives an indication of how much the French government is charged to borrow money on a 10-year basis. In this way it is also an indicator of economic confidence and the perceived outlook for growth. Movements in the TEC 10 often produce changes in the available fixed rate mortgages in France. These changes are not instant and usually take a few weeks to come into effect.

french mortgage rates

Currency Rates vs Euro

Despite a strong start to the month, the euro is on the back foot once again. Mario Draghi and the European Central Bank cranked up the pressure on the euro yesterday as part of their latest policy decision. Despite holding off on any change in interest rates or the amount of assets the central bank will purchase before September 2016, the hints suggest some form of monetary policy weaponry will be unleashed at the Bank’s next meeting on December 3rd. The European economy is growing but inflation remains low and, as long as it does, then the markets will be betting that the single currency will remain low too.

Currency

1 GBP €1.40
1 USD €0.91
1 AUD €0.65

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