French fixed rate mortgages fall again

French property Bordeaux

September saw fixed rate mortgages fall to their lowest ever level, as predicted in last month’s French mortgage watch. The TEC 10 fell to 2.54% on the first of September and rose from there through the month to 2.85% dropping back to 2.66% by the end of the month. We are not currently seeing rises in the rates but October may bring small increases to some lenders fixed rates. There is still some regional variation in the fixed rate mortgage market with banks in Bordeaux, Limousin, Poitou, Charentes and the Midi Pyrenees all offering lower rates than for other regions.

On the variable side of things, there still seems no sign of a hike in the base rate which would bring changes to the 3 month Euribor rate against which the majority of variable lending is pegged. The 3 month Euribor is up to 0.88% from .65% in May largely due to the perceived increase in risk by banks lending to each other. If you are thinking of buying in Alps and have a 20% deposit, you could go for a variable mortgage based on the CHF Swiss Libor rates which would bring you in a variable rate of just 0.80% including the bank margin!