Mortgages in France: A Guide
Why baydonhill international mortgages?
  • Unique market knowledge
  • Multilingual team
  • Established relationships with banks
  • Proven track record of success
  • Personal attention

What are the steps involved in getting a French Mortgage?

These are our recommended steps to safetly obtain a mortgage in France:

  1. Find out how much you are eligible to borrow by completing our quotation request form
  2. Instruct Baydonhill International Mortgages to obtain an Agreement in Principle on your behalf
  3. Go to France and find a suitable property
  4. While in France, sign a sales agreement (Compromis de Vente) & transfer the deposit with Baydonhill Foreign Exchange to secure the property
  5. Submit a copy of the signed sales agreement to the lender
  6. Lender instructs valuation, if required
  7. Acceptance of life assurance by lender
  8. Lender issues a mortgage offer
  9. Open a French bank account and arrange buildings insurance.  This can be provided by Baydonhill's Insurance division
  10. Transfer balance to the Notaire with Baydonhill Foreign Exchange
  11. Arrange monthly mortgage payments with Baydonhill International Payment Plan
  12. Completion

 

 

What are types of French Mortgage Available?

Mortgages can be obtained for the purchase of new or existing properties, Gites and properties on Leaseback schemes.

French lenders will not consider lending to UK companies but it is possible to create a French company expressly for the purchase of a property.  This is called an SCI.  This type of purchase may be advantageous for groups buying together and can minimise French inheritance issues.  However, we do recommend you seek legal and tax advice on this matter.

For renovation and construction loans, estimates must be provided by French registered builders at the time of application.  In the case of construction loans, more detailed information will be required. Funds will be released by the lender directly to your builders following submission of invoices.

Capital raising is available on your property in France and the amount you can borrow will be determined by a valuation arranged by the lender.  It is also possible to raise funds on your French property to fully redeem your UK mortgage as well as any personal loans.

Remortgaging is available.  However, this will incur costs both at the Notaire’s office and with the new lender.  We recommend that you check with your existing lender if any penalties will be payable for cancelling your existing mortgage and corresponding land registry deed.

Bridging finance is available between two French properties.

Am I eligible for a French Mortgage?

All mortgages are in Euros and will be secured on your French property.  Mortgages are full status and proof of income and outgoings will be required.

The maximum loan to value available is 90% of the purchase price plus estate agent's fees (excluding Notaire’s fees).

French lenders assess eligibility on the applicant's capacity to repay the loan.  As a guideline, your existing monthly outgoings and the repayment on your French loan should not exceed 35% of your gross monthly income.  A percentage of rental and investment income can also be considered.  Mortgage, rent, personal loans and maintenance commitments are considered as outgoings.

What mortgage products are available in France?

A variety of products are available ranging from interest-only to repayment mortgages on a variable or fixed-rate basis or a combination of both. Terms can be from 5 to 25 years however loans must be repaid by 70 years of age. Many of our products do not have any early redemption penalties.

Is Life Assurance Mandatory with a French Mortgage?

Life assurance is mandatory with the majority of French lenders requiring borrowers to accept their chosen provider. In some instances, it may be possible to utilise an existing or new UK policy provided cover is for the Sterling equivalent of 120% of the loan amount and for the duration of the mortgage term plus five years.

What documentation is required by a french mortgage lender?

The following documentation will be required through the application process.
  • Proof of identity & residence
  • Proof of income & outgoings
  • Bank statements
  • Property details

Buildings insurance

This must be in place for completion. Baydonhill Insurance can provide you with a quote.

Bank account

You will be required to open a French bank account before completion.Baydonhill can assist you with this at no additional cost, if required.

What timeframe is involved in securing the mortgage?

An Agreement in Principle can be obtained from a lender once all the requested documentation has been submitted. This takes approximately three working days. However, for loan amounts in excess of €750,000 this may take longer.

The mortgage offer cannot be returned to the lender until a ‘cooling off’ period of eleven days has elapsed.

A minimum of six weeks should be allowed from application to completion.

 

Organising payment of your French mortgage

Please be aware that missing a monthly mortgage payment may have serious consequences and we therefore strongly advise participation in our overseas payment plan. This service gives you peace of mind in the knowledge that your French mortgage repayments will be met automatically each month.

Completion

Mortgage funds will be released by the lender to your Notaire for completion of the purchase.

 

Costs of setting up a French mortgage

Bank’s arrangement fee – typically 1% of the loan amount up to a maximum of €2,000.  Should the lender wish to carry out a valuation, this will be covered by the arrangement fee.  The fee will be deducted by the lender from your French bank account following completion.

Estate agent’s fees - these can be included in the loan amount.

Notaire’s Fees – your Notaire will provide you with a breakdown of fees payable once a sales agreement has been signed.  If you take out a French mortgage at the time of purchase or at a later stage, a further cost will be passed on to you by your Notaire for registering the mortgage with the land registry.

Baydonhill charges a non-refundable application fee of £200.

We recommend that professional legal & tax advice should be sought to protect your own interests.