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Buying Guide – France

Lending criteria

Mortgages are available in GBP, USD, Euro, Yen, CHF, AUD, NZD, CAD, HKD or SGD and will be secured against French residential property.  French mortgages will require full disclosure of income, outgoings and savings.

The maximum loan to value available is 85% of the purchase price, or valuation, whichever is the lower.

French lenders assess eligibility on the applicant's capacity to repay the mortgage, as well as recent credit history.  As a guideline, your debt to income ratio should not exceed 35% of your gross monthly income; however there may be a degree of flexibility in this for certain types of applicant.  Mortgage, rent, personal loans and maintenance commitments are all considered as outgoings.  To find out how much you can borrow and for a formal decision in principle, please click on Apply Now.



Types of mortgage

Mortgages can be obtained for the purchase of new or existing properties, as well as for refinance/remortgage. The property must be registered at the land registry as a habitable civil dwelling.  Please note that the criteria for ‘habitable ‘is set by the local authorities and unless the property has been granted this certificate, mortgage finance cannot be obtained.  

Renovation and construction loans are available, however estimates will be required at the time of application, and clients must have obtained all the necessary authorisations. Once the mortgage has been approved, funds will be released by the lender directly to your builders following submission of invoices.  The property must be classified as ‘habitable’ before a lender will consider an application for a renovation loan.  In the case of construction loans, more detailed information on the project will be required, so please contact us.



Mortgage products

A variety of products are available. Both interest-only and repayment mortgages can be arranged, on a variable or fixed-rate basis, or a combination of both. Terms can be from 5 to 25 years; however loans must normally be repaid by the age of 70, although in certain circumstances this may be extended.  Many of our products do not have any early redemption penalties.   For an idea of the rates available please contact us, or for a personalised quotation by clicking on Apply Now.


Documentation you will be required to provide

Documents will need to be either original or certified copies. Items such as passports and driving licences will need to be in date at the time the mortgage is due to complete or close.

To avoid any problems with agent’s immobiliers or notaries, it is strongly advised that you take the appropriate independent legal advice before signing the "Promise de Vente". The bank will require a copy of this document to be forwarded with the relevant application form. However you are able to sign this contract with the clause “subject to mortgage finance" as the contract, once signed is legally binding.



Timeframe

We will issue a decision in principle within 48 hours of receiving a fully completed application. 

The processing time from the application being received by the lender to completion or closing is approximately 6 weeks.



Life assurance

Life assurance is compulsory in France.  However if you would like to receive a quotation for life cover please contact us and we recommend a provider to organise an illustration for you.



Buildings insurance

This is a compulsory part of the mortgage process, and can normally be taken through the lender or via an approved third party insurance company. This will need to be in place for when the mortgage completes or closes. Please contact us for an illustration. 



Bank account

You will need to open a French bank account before completion, from which your mortgage repayments will be debited. This can also be used for utility bills, taxes etc. We can assist you in opening an account. The relevant RIB (Relve D'Identite Bancaire) will be required before the release of funds.



Payment of your French mortgage

Please be aware that missing a mortgage payment in France may have serious consequences and we therefore strongly advise you arrange for monthly debits from your local bank account. A number of foreign exchange providers offer a renewable 12 month regular payment plan. The exchange rate is fixed at the start of the plan, and the agreed amount will be debited from your local account and sent to your French account each month. This service gives you peace of mind in the knowledge that your mortgage repayments will be met automatically each month. Please contact us to recommend a provider if this is of interest.



Transferring funds to France

Whilst purchasing your French property it is also likely that you will need to transfer funds to France, to pay a reservation fee, a deposit on the property, or to cover additional purchase costs.
Making payments in a foreign currency will mean you are exposed to movements in exchange rates. This is likely to affect the final cost of the property you are buying, as will the exchange rate you receive when you make the transfer.
Through our carefully selected foreign exchange provider we are able to not only save money on the exchange rate you receive but reduce your exposure to exchange rate movement.

For further information on how these services can benefit you please contact us and we will be able to answer any questions you may have.

Completion

You do not have to be present at completion and can give Power of Attorney if necessary. Your Notary or lawyer will be able to discuss this with you in more detail. The Notary will register the mortgage deed after completion.

Costs of setting up a French mortgage

French house prices normally include agents' fees. They are quoted like this: €99,000, FAI - meaning 'Frais d'Agence Inclus'.

So, the buyer in France usually (but not always) pays the agents fee.

The price of the property, excluding the agents' fee is called the 'net vendeur' price.

In addition, the buyer has to pay the notaires fees.

These can be as much as 10% of the value of a low priced property but are normally around 7% of 'net vendeur'' price. On a new build property they are reduced to 2.5% of the price.

The fees consist of stamp duty on the purchase of 5 - 6%, plus the notaires fee of around 1% to carry out the conveyance.

Finally if you are borrowing in France to buy the house, the notaires fees are increased by a further 1 - 1.5% to pay the 'frais de garantie' - mortgage registration tax, making the total notaires fees 8%.

Bank’s arrangement fee: Typically 1% of the loan amount

Valuation fee – this will vary according to the purchase price

Buildings insurance – is compulsory, payable either monthly or annually to provide basic cover for the duration of the mortgage.

Contents insurance – this is optional but recommended to cover the cost of damage to furnishings etc.

Landlords insurance – if you are going to let your property, this should be put in place, not only to cover contents, but also loss of rent, emergency repairs, and cover whilst unoccupied

We charge a non-refundable application fee of £150.00.  A further fee may be payable on completion of the mortgage.  Please refer to your personalised quotation for confirmation


We recommend that you seek professional, legal & tax advice before purchasing in France

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. Be sure that you can afford the repayments before entering into any credit agreement. Any quotation supplied is not an offer of mortgage and may be subject to a change without notice. Exchange rate movements may increase the Sterling or home currency equivalent of your liability under a foreign currency mortgage.