French Mortgage Q & A – How to pay off a French mortgage

jigsaw

How to go about paying off the outstanding amount on a French mortgage is one of our most commonly asked questions. We were recently asked to provide a response to someone who wrote in to Living France Magazine on this subject.

Hi,

I have been reading your Magazine for some time but have never seen the subject of how to pay off a Mortgage and the resulting conditions.

Briefly, my wife and I bought an apartment in Nice back in 2006. We paid €150,000 for it with a €100,000 deposit and took a €50,000 mortgage with a Branch of GE Moneybank, which has now closed all its local branches and has moved to Paris.

It was an interest only mortgage but we managed to overpay and now have it down to €36,000 euro. I do not have a very good grasp of French yet (I fear it is a little late at 63) but asked for a final figure which was approximately €36,360.

We now have enough funds to clear this bill but are unsure if we should still pay GE MONEYBANK the outstanding amount and then how we get them removed from our deeds, which still shows their details.

Also, since I have asked for the settlement figure I noticed they have now stopped taking the 300 euros, which we were overpaying. Can someone please let me know if I pay the final bill, do I need to do this through a Notaire?

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In this case the process for paying off the outstanding balance would be fairly simple. Although you have already asked for a statement of the account and they have provided you a figure, you should write again asking for a full redemption statement or ‘Capital Restant Dû’. They will then provide a full settlement statement, including the outstanding amount on the loan, plus any remaining monthly installments and also an early redemption fee if you have one.

You would then send a cheque for this amount. If any surplus money was remaining on the loan account after the bank had cashed in the cheque then it would be wired into your general bank account.

Regarding the cessation of the €300 debit, it may have been that the bank interpreted your initial letter as a Capital Restant Du and therefore stopped the debits in anticipation of a final payment. I’m sure that unless they receive a final payment soon then the €300 payments would resume fairly promptly.

The process of removing the bank from your deeds is called the ‘Mainlevée Hypothécaire’. This happens automatically two years after the loan has been settled, but if you wanted it to come off sooner you would need to write to your Notaire who would start the process for you. Of course this would come with a fee, albeit smaller than the cost charged to when your Notaire carried out the ‘Frais d’Hypotheque’, which was the process of putting your bank on your deeds. Costs for a Mainlevée Hypothécaire are usually about a third of those charged for the Frais d’Hypotheque, which vary by region and property type, but are normally around 0.5%-1.5% of the loan amount. Therefore if you can remember the cost of your Frais d’Hypotheque it will be about a third of this.