French Mortgage Watch – February 2015

french alps property

The ‘pâtisserie est ouverte!’ French property sales surge on excellent purchase conditions

French property agents and developers are all talking about a return to the heyday of French property sales in the middle of the last decade as sales surge on the weak euro and ultra-low interest rates. One of our major partners has experienced record sales on new-build property in the Alps posting 40% of last year’s turnover in the last two months alone and the trend is set to continue into March with “hot cakes” and “des pains au chocolat” being mentioned.

The biggest difference now is that current purchase values are much higher than they were in 2005 with many more people buying in the €1m+ range. Whilst people are buying across France, the Alps are in special focus and with the all-time low for a 20-year fixed rate mortgage now at 2.65% for a standard client, we can see the buying spree continuing for some time to come.

French Mortgage Best Buys
Repayment
Rate Duration LTV Description
2.00% 20 years 80% Tracker mortgage 3m euribor +1.9%
2.10% 25 years 80% Tracker mortgage 3m euribor +2.0%
2.80% 25 years 85% Rate capped + 1.5% for 10 years
2.65% 20 years 80% Rate fixed for the term
3.05% 25 years 80% Rate fixed for the term
3.30% 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%
3.55% 15 years 70% Fixed rate

France in the Press

Positive news about the French economy and how other countries financial woes are effecting French ski resorts make this month’s round up.

France PM Valls pushes key economic reforms through

French economy grows slightly

Russian economic woes hit French slopes

Property of the month

French-mortgages

Combloux-Megève

  • Luxury ski chalets
  • Up to 80% LTV mortgages available
  • Central ski-in location
  • Great views of peaks & village
Find out more

From the blog

Transaction of the month – luxury chalet using an SCI

This month’s transaction of the month is by a HNW buyer who used the ultra low rates and advantageous SCI structure to purchase a large chalet in the French Alps. Read more

Top 10 most expensive ski resorts in France announced
Megève, where you can buy a property for an average price of 7497 euros per square meter, tops the ranking according to new data from MeilleursAgents.

Read more

French households have less debt

New figures show France has less household debt, even when compared to those of the world biggest economies.

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A 100% residential building coming soon to La Defense

For the first time in 30 years, the ‘Skylight’ building in Paris’ La Defense district will be 100% residential, comprising 168 student rooms and 113 dwellings.

Read more

Rate and indices

European Bank Base Rate and Euribor
TThe 3-month Euribor has dropped once again, pushing down French mortgage rates even further. 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.

mortgage advice

Fixed rate mortgages: The TEC 10 index

The Tec 10 has rebounded slightly from the low 0.5 mark to the mid 0.6 mark this month. 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 tips

Currency Rates vs Euro

All eyes remain on Greece as the euro has traded through the early days of February in a rather skittish manner. Both Greece and the European Union still seem far apart at the negotiating table and a deal on funding must be reached by the end of February or the Greek banking system will run out of funding. We know funds are leaving Greece, it is a case of how much and how fast that will govern the stability of the Greek infrastructure. It is hard to be positive on the euro at the moment but we believe that a deal in the end will be completed.

Currency

1 GBP buys 1.36
1 USD buys 0.88
1 AUD buys 0.69
French Private Finance