FRENCH MORTGAGES:

*     Non-French residents can obtain a French mortgage, up to 100% of the purchase price inclusive of VAT

*     Many banks in France are now very familiar with non-resident buyers and we can recommend you to the most competitive ones. In general, mortgages in France and Continental Europe are less flexible than in the UK: more documents to be provided, fixed rate market, no self-certification, limited interest-only products

*     No self-certification.Therefore, it is difficult for self-employed and business owners, need to produce 3 years account, letter from chartered accountant,…

*     Interest-only mortgages: There are 2 types. The first one usually requires to set-up funds every month (which cannot be accessed) equal to the repayment amount, which defies its real purpose. The second type, is the same as in the UK, but it is more difficult to get. Not everybody can qualify. Interest rates vary from 5.90 % for 15 years fixed rate and 4.35% for 15 years variable rate, so a guaranteed return above 4.35% would largely cover the interest payment.

*     Repayment mortgages: Fixed Interest rates start at 4.9% for 15 and 20 years and from 5.30% for 25 years variable rate. Variable interest rates will start at 4.35% for a period of 15, 20 and 25 years.

*     Approval in principal: Banks in France look at the overall borrowing capacity and they do not look at the investment only. French banks will look at a person’s coverage ratio. The total of interest payments & repayments must represent less than a 1/3 of your income after tax (including regular salary + a portion of your year-end bonuses + rental income). This is obviously a general rule as each decision is taken by the bank’s credit committee on a case-by-case basis. This takes into account your current mortgage payments in the UK & abroad, car loans, credit cards repayments and all other borrowings both in the UK and abroad.  If you already have several property investments but they do not appear on your main bank accounts (where you get your salary), we would suggest not to mention it to the bank, as this will decrease your borrowing capacity.