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Chateau Mortgages - a Guide

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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: 25th June 2019* | Published: 30th May 2019

What you need to know before you buy a chateau in France

Upping sticks to live a carefree life in France is the lifelong dream of many Brits, and with programmes like Escape to the Chateau airing on TV, prospective home buyers have realised that buying a French chateau is more achievable than they ever imagined.

But before you make any hasty decisions, take a read of this article. We’ll be explaining why buying in France can be less costly than the UK, how to go about buying a chateau in France, the implications of getting a mortgage on a chateau for renovation purposes versus one that’s ready to move into.

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Is buying a château in France possible?

Yes! It’s not out of the question if you find the right international lender or a UK-based mortgage provider who’s happy to offer mortgages for overseas properties.

French châteaux refer to "palaces", “stately homes” or "country houses”, and less commonly, castles. France has many châteaux of all shapes and sizes on the market, many of which date back to the early 19th century.

Buying French property of this kind can be tempting because you can get a lot more for your money than you would in the UK. The French population is roughly around the same size as the UK’s, but the country is twice as large.

As such, there just isn’t the same level of demand for property as there is in the UK, meaning you can often snatch up a majestic chateau for a fraction of the price of a British equivalent.

Buying a derelict château in France

France has over 30,000 castles, and a large number of them are abandoned and in varying states of disrepair. Many people find the prospect of taking on a property that doubles as a renovation project appealing, but bear in mind that this can be challenging, and requires a lot of time, effort and dedication - not to mention cash.

As you’re unlikely to be able to carry out the whole refurbishment yourself. Remember you might need to hire professionals to handle any technicalities and construction aspects you’re unable to do on your own. There are also different legal requirements to consider when it comes to French property.

If you’re looking to get a mortgage on a derelict French chateau, all of these renovation and legal costs will be considered when calculating your affordability and how much providers are willing to lend you.

Furthermore, France is a country that’s very proud of its history and culture. Don’t be surprised that many buildings of these types may have restrictions on what you can and can’t do to them in order to preserve their historic appearances.

Can I borrow funds to carry out the renovations?

Yes, this is potentially possible as the advisors we work with have access to specialist lenders who offer international bridging loans and international development finance for renovation and construction projects involving overseas properties.

Make an enquiry here to find out how these products could help you finance the purchase and renovation of a chateau.

Buying a château ready to move into

Some buyers simply want to purchase a new home overseas, move in, and be settled in within a matter of days.

There are of course plenty of beautiful homes on the market in France, many of which carry modest price tags compared to the UK. If you go down this route, you may find it easier to get a mortgage on your chateau as you’re not planning major expenditure on remodelling on a listed building.

While this type of property will, of course, be more expensive than a chateau in need of renovation, in many cases, this route involves less effort and overall expense. What’s more, when it comes to re-selling a property you’ve renovated yourself, you may end up at a loss after you’ve put in so much time and money to convert it.

To get the best of both worlds, some borrowers purchase a turnkey property, which is liveable, but gives you the opportunity to make small modifications to up the value. For example, you may be able to find a chateau that has attic space which can be converted into extra rooms, or a property which comes with outbuildings which can be done up and rented out for special events.

Buying a chateau for commercial purposes

Many people purchase a luxury building abroad as a business investment. You may be looking live in the property, but develop some of it into a hotel or bed and breakfast to generate revenue. Or perhaps you intend to let it out as a holiday home, or as a majestic venue for special events?

In this situation, you will have to take out a commercial property mortgage as the chateau will be acting as a business premises, or a business in itself. Commercial mortgages allow customers to borrow much larger amounts on a secured basis.

If you’re looking to buy chateaux for business purposes, we strongly advise you speak to an expert broker that can scour the entire market and find the best deal considering your circumstances. Contact us to speak to an advisor, or view our guide to commercial mortgages.

How to buy a chateau in France

Your options are to find an international lender who specialises in these properties, a UK-based provider than lends internationally or a niche lender in France.

All of these can be difficult to find and doing the legwork yourself is not recommended, since making too many lender enquiries can negatively impact your credit files.

With this in mind, the best way to find a lender who specialises in chateaus is through a whole-of-market broker. That way, you can be confident of ending up with the best deals you’re eligible for. Make an enquiry to speak with one today.

What other factors impact getting a châteaux mortgage?

There are a number of factors that will affect your eligibility for a chateau mortgage based on the general eligibility criteria of most lenders.

Listed building restrictions

Chateau tend to be listed buildings, and are therefore classified as “non-standard” construction types. There are different levels of listed buildings, Grade I, Grade II* and Grade II, each of which have different mortgage implications.

Many of the grander châteaux may be classed as Grade I, the highest (and riskiest) type, particularly those with exceptional historic interest. Many providers do not lend on Grade Is because of concerns around structural integrity, habitability or future saleability - but there are still a select few lenders out there who will consider you.

Get in touch to speak to a listed building mortgage specialist.

Income & affordability

Every lender considers income types differently. Many favour full-time PAYE employees, for example, as there is the assurance of a steady income.

Some lenders will cap what they will lend you at multiples of your income, whereas others use more sophisticated methods to ascertain how much you can realistically afford to repay each month.

High net worth mortgages

As covered, many people who are looking to purchase chateaux in France do so with the intention of completely refurbishing the property, and can afford to spend millions to achieve the desired outcome for their home or business.

Despite having the cash at hand to pump into the property, many high net worth customers still look to take out mortgages for such projects so as not to tie up large sums of cash in one asset.

If this applies to you, you may experience difficulty finding a high street lender that offers the required level of expertise for your needs. This is where we come in; make an enquiry today and we’ll refer you to one of our specialist high net worth mortgage advisors.

Loan to Value (LTV)

A property’s LTV ratio can significantly impact whether a provider will lend to you, especially when it comes to high risk listed buildings, and even more so if you’re planning major renovation works.

In “normal” circumstances, some residential lenders will accept 95% LTV, but with non-standard constructions, LTV requirements are lower. Depending on whether you’re restoring a chateau or are moving in straight away, you may be required to put down a far larger deposit, perhaps in the realms of 20% or so.

Credit history

While it is still possible to get a mortgage if you have a history of adverse, every provider has different eligibility criteria. What’s more, lenders often base their decision on the severity of the issue and how long ago it was added to your file.

Visit our bad credit section to find out how your credit history could impact your application on a mortgage for a French chateau.

Property Construction

Most buildings of this type are quite old and therefore non-standard methods of construction such as stone or concrete are ubiquitous. Most lenders will also want a full structural survey done before they will consider lending.

If you do intend to buy the property as an investment and let it out, most lenders now have minimum energy efficiency requirements before they can lend. Properties of this type will often not have the same standards of insulation as more modern properties. You should ensure you obtain an EPC certificate from the seller before committing.

Talk to a chateau mortgage expert today

For more information on chateau mortgages or to get the ball rolling on your application for one, call Online Mortgage Advisor on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s no obligation or marks on your credit rating.

Updated: 25th June 2019
OnlineMortgageAdvisor 2019 ©

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.