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Mortgages in France
Find out what you need to know to get a mortgage for property in France.
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Author: Pete Mugleston - Mortgage Advisor, MD
There are many great reasons to buy a home in France, not least the food, wine, and weather. Properties there can be much cheaper than their equivalent in the UK and the cost of living is lower in most comparable areas.
If you’re ready for a new life in a glamorous French city or the bucolic countryside, here’s the essential information you’ll need to know about getting an overseas mortgage on a French property as a UK resident.
Can UK residents get a mortgage in France?
Yes! You don’t need to be a resident in France to get a mortgage there. French mortgage lenders will consider applications from buyers anywhere, including the UK.
British buyers are often pleasantly surprised to find out that the rates for French mortgages are consistently lower than for other countries. For example, data from the first half of 2022 shows that it’s common to find mortgages below 1.5%. Here’s some information on the different mortgage types that are available:
Fixed-rate mortgages
Fixed-rate mortgages in France work in much the same way as in the UK. You’ll lock in your mortgage rate at the start of the term and then your monthly repayment amounts will stay the same. The downside is that it can be difficult to overpay or repay early.
Variable-rate mortgages
In the UK, variable-rate mortgages are usually linked to the Bank of England base rate and when that rate increases, your monthly repayments rise. In France, variable-rate mortgages are usually linked to the European InterBank Offered Rate (EURIBOR). Your monthly repayments won’t usually increase if it rises, but instead, your mortgage term will get longer.
Capped-rate mortgages
A capped-rate mortgage offers a compromise between a fixed and variable rate. The rate can increase but won’t ever exceed an agreed figure. As a trade-off, you’ll be able to make penalty-free overpayments if you want to.
Interest-only mortgages
Interest-only mortgages are available in France but not usually to non-residents. You’re unlikely to get one unless you can demonstrate that you have the funds available to cover the total loan amount if necessary.
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Rules, lending criteria and deposits
In France, there are three sets of rules and lending criteria for three categories of buyers: French residents, EU residents, and non-EU residents. Fortunately, even after Brexit, UK residents follow the same rules as EU residents (which are more generous than for non-EU residents). Here’s a summary of those rules and criteria.
- Age: The maximum age for a UK borrower at the end of the mortgage term is 75. For borrowers outside the EU or UK, the maximum age is 55.
- Affordability: Your total financial liabilities (i.e. mortgage repayments, other debt repayments, rental cost, etc.) must be no more than 35% of your pre-tax household income. This applies across all categories of buyers.
- Employment status: Self-employed borrowers and business owners will need to show three years of accounts. Affordability will be assessed based on turnover.
- Assets: Lenders prefer that non-French borrowers have some wealth in cash and not only in non-liquid assets such as property.
- Minimum loan amount: Most lenders only consider applications from UK residents to borrow €150,000 or more. It’s €250,000 for other non-EU residents.
- Property type: The type of property can be a major factor in the decisions, especially for foreign buyers. Mortgages for newer properties are more likely to be approved than for run-down, remote properties.
The maximum loan-to-value (LTV) for a UK or EU resident is 85%, though many lenders will only offer 75-80%. That means that the minimum deposit you’ll need is 15%, but 20-25% will give you more options.
Lenders can also make additional demands of foreign buyers to manage the elevated risk. You may be asked to:
Open a French savings account with sufficient funds to cover your first two years of mortgage repayments- Take out a life insurance policy for 120% of the loan amount and name your lender as the beneficiary
- Take out health insurance that will cover the cost of your mortgage repayments if you are unable to work due to illness or injury
How much can you borrow?
Two main factors determine how much you can borrow:
- Your deposit size. You’ll need a deposit for at least 15% of the property value. So, if you have a deposit of €30,000, you might be able to borrow €170,000.
- Your debt-to-income ratio. Your total liabilities cannot exceed 35% of your pre-tax income. So, if your pre-tax monthly income is around €5,000 and your current liabilities are €750 a month, your mortgage repayments cannot exceed €1,000 a month.
To get an idea of how much you could borrow, based on these parameters, try our mortgage repayment calculator. Simply input some details about the mortgage you think you’ll need. Once the repayment is calculated you can check this versus your monthly income to see if it is below the required ratio.
Mortgage Repayment Calculator
Our mortgage repayment calculator can tell you how much your mortgage will cost you each month and overall. Enter the amount you’re borrowing, the term length and interest rate, and our calculator will do the rest.
Monthly Repayments:
Total amount paid at end of term:
Get started with an expert broker to find out how much they could help you save on your mortgage repayments.
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How to get a mortgage in France
Getting a mortgage in France can be straightforward with this step-by-step approach.
Get an agreement in principle
Just like in the UK, you can get an agreement in principle from a French lender by providing some basic details about you and your income. This way, you’ll know roughly how much you can borrow before you start looking at properties.
Prepare your paperwork
The process for getting mortgage approval in France can be time-consuming, but you can ensure it runs as smoothly as possible by getting all your paperwork in order. You’ll need:
- Passport
- Proof of address
- Marriage certificate (if applicable)
- Proof of income
- Tax returns
- Past three months’ bank statements
- Documentation for current mortgage
- Documentation for life insurance
- Sales agreement (compromis de vente)
Speak to a broker who specialises in French mortgages
Mortgages can be confusing at the best of times. Buying a property abroad, in another legal jurisdiction and another language, adds to the potential for mistakes and errors, which can cause delays or even mortgage refusal. It’s best to work with a broker who understands the market and can guide you through it.
To speak to a broker we work with who fits this description, get in touch.
Which lenders offer French mortgages?
You can get a mortgage on a property in France either from a French lender or an international lender that operates in both the UK and France. French lenders include BNP Paribas, Société Générale, and Banque Populaire.
UK banks that operate in France include Barclays and HSBC (although HSBC only offers French mortgages to private banking or Premier customers). The advantage of working with a UK bank is that the forms, contracts, etc. will be in English.
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Buy-to-let in France
There are numerous differences between buy-to-let in the UK and France. French tenants have more rights (for example, the landlord cannot end a tenancy, no matter how much notice is given, if the tenant has paid their rent and kept to their contract) and French landlords must pay higher taxes and legal fees than their UK counterparts.
It is also harder to get a buy-to-let mortgage in France. Not all lenders offer them, and it can be difficult to satisfy your lender that the property will generate sufficient income. It is best to speak to a broker who specialises in buy-to-let investments and can advise you on the viability of your plans.
Speak to a specialist in French mortgages
While France is one of the easier countries to get a mortgage in as a UK citizen, there are still nuances and intricacies to the legal homebuying system that can be difficult to navigate for the first time.
If you’d like expert guidance, as well as advice on which mortgage would suit you and help to find the best rate, it’s best to speak to a broker who specialises in French mortgages. If you’d like us to connect you with one, just call us on 0808 189 2301 or enquire online.
FAQs
Potentially. The biggest barrier is that France has strict rules on mortgage affordability and your total financial liabilities cannot exceed 35% of your pre-tax income. If the second mortgage will not cause your liabilities to exceed 35%, you should be ok.
You can only get a 100% mortgage in France if you’re a tax resident there. UK tax residents can typically borrow up to around 80%.
Speak to a French mortgages expert
Maximise your chance of approval with a dedicated specialist broker