Notes :

1. French rates & repayments quoted are fair representations as at 17/08/2012 and are dependent on client's criteria
2. Monthly repayments are indications for a French repayment mortgage per 10,000 €
3. French rates and monthly repayments are subject to status
4. Terms, French rates and repayments are indicative and non-contractual
5. Murcef law 11.12.2001 "No payment of any kind may be demanded from a person, before obtaining one or more loans of money".

 

Know your French rates

French mortgage are traditionally a fixed rates market (i.e. fixed rate for the life of the French mortgage). This is mainly due to the fact that real estate prices have remained relatively steady in the past and have not known the considerable hikes in prices that we have seen year after year in the UK/US markets. That means that with a less speculative market, purchasers can get more easily on - or up - the property ladder. It also means that purchasers have needed to capitalise during the course of the mortgage, as there is less chance of recuperating a major profit on resale. Interest only loans therefore (in France: “In fine mortgage”) have up until now attracted mainly investors.

In recent years French fixed rates having been as low as 3,5% (2005) French buyers took out a fixed rate mortgage for 20/25 years, and then could afford to forget about it. Even recent rates which on the home market have varied around 5% remain sufficiently affordable for borrowers to commit to on a long term basis.

Fixed rates – fixed for the duration of the loan so you have the security of knowing exactly how much you will pay each month
Variable rates – based on the Euribor, banks apply the 3 month or 1 year Euribor plus their margin. Loans may include an initial fixed rate of 3 months, 1/2 years or more. Also available is a variable rate on the Swiss Libor.
Capped mortgages rates – security capped variable by 1 or 2% which limits exposure to higher mortgage interest rates.