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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 15th June 2020*

From the bustling, romantic capital of Paris, to the rugged hilly peninsula of Brittany and historic Normandy, moving to France is a long-held dream for many of us, whether for retirement, a holiday home or even as a buy to let investment.

But just how easy is it to get a mortgage on a property in France? How do you go about getting one, what criteria and requirements are there and which mortgage providers would be willing to loan you the money?

In this guide to getting a French mortgage we’ll be covering all this and more:

If you’re interested in buying French property and would like to discuss how you can secure a mortgage, call us on 0808 189 2301 or make an enquiry.

We can arrange for an advisor we work with, who has experience arranging mortgages in France, to get in touch.

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Considerations when getting a mortgage on a French property

As with any overseas property purchase, particularly where lending is involved, the process can be slightly more complicated than in your own country.

When considering a mortgage to buy a French property, it’s important to be fully aware of the following factors:

Tax liability

Make sure you account for all the tax you’re liable to pay in both the UK and France. One small mistake or misunderstanding could end up costing you a lot of money. Make an enquiry to speak with an expert if you’re unsure about this.

Double-check the paperwork

Read through any documents and contracts thoroughly. Your mortgage broker and lawyer can do this on your behalf to make sure that you have the correct permissions, licences and planning consents in place before any agreements are signed.

In addition, ensure to consult your lawyer and your mortgage advisor before you pass over any deposit as some countries require a non-refundable deposit to secure a property.

You may also want to consider employing a professional translator also.

Exchange rate changes

Changes to the exchange rate could have an effect on the value of your overseas property, and in turn, your mortgage payments. A prolonged series of fluctuations could, potentially, make your mortgage unaffordable.

Fortunately, all lenders are under obligation to let you know if the exchange rate fluctuates by more than 20%, and give you the option to repay the mortgage in another currency.

It’s so important to seek advice from specialist French mortgage brokers, or a whole of market broker such as the ones we work with. They have access to over 100 different lenders across all niches and have specialist knowledge of the French market,

We’re confident that they can find the right broker for your needs and circumstances, potentially saving you time and money in the long run.

How to go about getting a French mortgage

Purchasing a property overseas can be quite daunting and less straightforward than buying in the UK, so the best place to start is by making an enquiry with a specialist broker who can provide local knowledge about the French market and can help you find an appropriate mortgage lender.

Are there any differences between buying a property in Paris, using a mortgage, than other regions within France?

The actual location of where you’re looking to buy won’t result in any real changes to the types of mortgage available to you. The major difference really relates to the amount you may need to borrow.

The more popular locations will, naturally, attract higher property values.

Property prices in Paris, as you would expect for a capital city, are amongst the highest in France, therefore, you are likely to require a larger mortgage to buy a house here as opposed to, say, Brittany or Normandy.

The south of France is also a popular location, particularly for anyone looking at a retirement or holiday home, including idyllic rural regions such as Dordogne and down towards the French Riviera along the Meditteranean coast.

Your eligibility will largely be determined by how closely you meet the internal criteria of mortgage lenders who cover the French market. Read on to find out what they are…

Funding: how much deposit is required for a French mortgage?

To get an overseas mortgage in France you’ll need a minimum of 15% deposit.

If you’re borrowing from a UK lender, expect to pay slightly more on a deposit for a mortgage in France – between 70-80% LTV. This is to compensate for the perceived risk and additional legal requirements and paperwork associated with overseas mortgages.

If you opt to borrow from a French lender, you can typically expect to borrow between 70-80% LTV, although some French mortgage providers limit themselves to just 50% for non-residents.

Remortgaging to buy a property in France

Not everyone can afford to put down a deposit on a second home outright. Remortgaging your primary home in the UK could allow you to take out a new, larger mortgage which can be used towards a deposit for a second house in France.

Before you decide to remortgage however, you must be confident that you will be able to keep up with the larger monthly payments. Using this method to raise collateral could place your main residence at risk in the event of a default.

Can you remortgage an existing property in France?

Yes, this may be possible and is usually quite straightforward, as the lender will simply assess whether you still meet their eligibility requirements and work out which rates you qualify for. Alternately, you could always look for a new lender in the hope of locking down more favourable rates.

This is where the expert advisors we work with come in, as they can track down and introduce you to the lender best positioned to offer you a table-topping deal.

If you get in touch we can arrange for an expert to contact you and discuss further

Equity release to get a French mortgage

If you’re a homeowner aged 55+ you may be able to release some of the equity you own in your current property to get a mortgage on a second home in France.

If you have an existing mortgage the funds will be used to clear that first, and the rest of the money can be spent as you wish.

Can I use an interest-only mortgage to buy a property in France?

Yes, it’s certainly possible. The different forms of lending available may vary depending on the french mortgage company and the terms they are able to offer, however, most lenders aim to provide both repayment and interest-only solutions.

How to find the best French property mortgage lenders and interest rates

For access to the best French mortgage rates and deals in 2019, contact a specialist French broker or whole of market firm who can calculate the most competitive deals and guide you smoothly through the mortgage process as a non-resident.

Do large UK Banks, such as HSBC, offer French mortgages?

Yes they do, but you normally need to be a Premier or Private Banking customer to obtain them. A big benefit for expats using a UK bank for such purposes is that they can communicate in English whilst offering the local knowledge required for the mortgage transaction.

It’s also easier for lenders based in the UK to source your credit history and account information which can be used to build up an all-round picture for affordability purposes.

Barclays is another UK Bank with a large global reach who can offer French mortgages.

Regardless of whether you would prefer to use a UK-based global bank or a local bank for your financing, a dedicated mortgage broker will be able to help you find the best deals that suit your own circumstances.

If you give us a call on 0808 189 2301 or make an enquiry we can arrange for an expert to get in touch.

Why you should seek professional overseas mortgage advice

Before you proceed with any mortgage, always seek legal advice from a lawyer who is independent of everyone else involved in the deal, including:

  • The Seller.
  • The Developer.
  • The Estate agent.

Accurate advice is crucial during the mortgage process, especially for an overseas property. It is highly recommended to work with a lawyer who is bi-lingual, familiar with property law in France and, most importantly, how it relates to non-residents.

If you’re appointing a UK legal firm, check that they’re registered with the Law Society in the UK and whether they specialise in international transactions and property conveyancing.

What other factors impact eligibility for a French mortgage?

There are a number of different factors which can impact the likelihood of being approved for a mortgage. Every lender will want to be confident that you can keep up with your mortgage payments, and will conduct affordability checks before authorising an application.

They will also look at your credit history, as some providers have strict rules surrounding what instances of adverse credit they will or won’t accept. Some lenders have age restrictions, or a cap on what age they will lend up to.

In addition to looking for residential mortgages, other opportunities can also exist which make buying a property in France such a tempting proposition, such as:

Buy to let mortgages in France

Many British residents invest in French property to let out to others. In some cases, the rental income generated can prove to be quite a lucrative source of revenue in addition to your earnings from elsewhere.

Bear in mind though that buy to let (BTL) mortgages, including those for french properties, tend to be on an interest-only basis, so after you’ve finished the term you will still have to repay the capital owed and will rely on the property increasing in value to make a profit.

Commercial mortgages in France

If you want to buy in France for your own residential purposes, i.e. a holiday home, you would apply for a standard residential mortgage. However, different rules apply if you’re looking to use the property for commercial purposes.

You typically need a significantly larger deposit for commercial mortgages but benefit from being able to borrow far greater sums of money, on a secured basis.

Commercial mortgages are different from residential in terms of criteria, affordability and how they are assessed. For more information consult our commercial mortgages hub or make an enquiry to speak with a specialist business mortgage broker.

Non-standard property types

France is amassed with historic châteaux, many of which can prove to be an attractive purchase. But buying an unconventional property can present you with additional problems.

Many mortgage providers are unwilling to lend on a property which falls outside the “standard construction” bracket, so be sure to check your lender’s requirements.

Get French mortgage advice from an expert today

Buying a French property can be both an exciting and daunting prospect all at the same time, particularly if you’re unsure how or where to find the right mortgage that would be most suitable for your requirements.

The advisors we work with can offer the expert local knowledge and advice you need, tailored to your own circumstances.  Call us on 0808 189 2301 or make an enquiry to get started.

Updated: 15th June 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.