M
any Brits are considering buying a second home or investing in France. Is a French mortgage a good option for them?
Absolutely, a French mortgage can oſt en be an excellent option. The cost of capital has historically been lower in France than in the UK, thanks to more competitive interest rates, especially over long terms. This allows for lower monthly payments and better tax optimisation. The graph below compares the 10-year
government bond yields (OAT) for France and the UK from 2000 to 2024. The data shows that France consistently maintained lower yields compared to the UK, particularly aſt er the fi nancial crisis of 2008 and also the Brexit referendum in 2016, making borrowing costs more favourable in France for property buyers.
Some British buyers may wonder whether it’s better to take out a mortgage in France or refi nance their main residence in the UK to buy in France. What are the diff erences between these two approaches? That’s a key question. The choice depends on several factors. Refi nancing your UK home might seem simpler, but UK interest rates are oſt en higher. Moreover, by taking out a mortgage in France, you’re fi nancing directly in the local currency, which limits risks related to exchange rate fl uctuations. Elements like the source(s) of income
(salary, dividends, pension…), cash versus non-cash assets shoud be taken into consideration as well.
What types of mortgages are available to foreign buyers in France? Is there a variety of options? Yes, there is a wide range of fi nancing options. You can opt for a standard repayment mortgage, with fi xed, variable or capped rates. There are also interest-only loans for
mortgages expert
Jeevanthy Nivert is the founder of Societe2courtage, a mortgage broker agency dedicated to non-resident (expatriates and foreigners) buyers in France. They finance 100+ nationalities over more than 60 countries of residences.
whatsApp: 0033 (0)6 51 61 00 74
Website:
societe2courtage.com
Schedule a call:
https://meetings-eu1.hubspot. com/jeevanthy/jeevanthy
The
buyers who wish to pay only the interest and repay the full loan amount at the end of the term. The most common choice among French people is the fi xed interest rate over a period of 20 years, nevertheless, this is not necessarily suitable nor the best option for non-residents. It is relevant to highlight that renovation
work (e.g. to improve the energy effi ciency) can be fi nanced too. Each borrower’s profi le can match a suitable off er, especially by working with a broker who can negotiate the best conditions.
What are the advantages of using a specialist mortgage broker, particularly for non-resident buyers? A broker specialising in non-resident loans has a deep understanding of French banks’ requirements and the specifi cities of each nationality and country of residence. The complexity goes up one level with a British family living abroad and wanting to buy a property in France; vice versa, a foreigner living/working in UK and wanting to buy a property in France. An experienced broker can save you time by directing you to the most suitable lenders and negotiating the best rates. While not mandatory, this oſt en increases your chances of getting a loan on favourable terms and makes the overall acquisition process more enjoyable.
Comparison of 10-year government bond yields: France vs UK (2000-2024) 5
4 3 2 1
0 2000 2005 2010 Year 2015 2020 2025
France (OAT 10 years) UK (10-year gilt)
If a buyer wants to secure fi nancing before signing the ‘compromis de vente’ (pre-sale agreement), is it possible to get an ‘accord de principe’ (mortgage agreement in principle) from the bank? Yes and no! As a broker, it’s entirely possible to get a ‘letter of comfort’ before signing the compromis de vente. This can even give you an advantage during negotiations with the seller and peace of mind about the overall acquisition process. On the other hand, getting an accord de principe (mortgage agreement in principle) from the bank is not possible until you have signed the compromis de vente. These steps are always logical and therefore important to understand, especially for foreigners who are at the beginning of the process.
Expert Guide l 27
Yield (%)
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58
