Mortgages in France: Your Guide to Buying Property in France (2024)

How much can I borrow for a French mortgage?

When you’re considering getting a mortgage in France, it’s essential to understand how much you can borrow and what factors will influence that amount.
French banks and mortgage lenders usually offer loans up to 85% of the property’s value, which is known as the loan-to-value (LTV) rate. However, the LTV rate is typically between 50% and 75% if you’re a non-EU national.
For French citizens and permanent residents, there’s a possibility of borrowing up to 100% of the property’s value. In some cases, this may come with a requirement to deposit a certain percentage of that amount into a savings account with a French bank.
Your income plays a significant role in determining the amount you can borrow. According to the legal requirements for French mortgages, your total monthly liabilities, including mortgages and insurance, should not exceed 35% of your gross monthly household income. Lenders consider various types of income, such as salaried income, business income, pensions income, existing rental income from other properties, dividends with a three-year track record (in some instances), and other regular investment income.
If you’re self-employed or work as a freelancer, you’ll need to provide business statements as evidence of your income for the past three years.
Most mortgage providers in France have a minimum loan amount they are willing to lend. Typically, this minimum falls between €50,000 and €100,000, although some lenders may set it higher. Non-EU nationals might also face higher minimum loan amounts.

What other fees should I expect to pay when getting a French mortgage?

Several factors come into play, and it’s important to consider them carefully. Generally, purchasing existing properties tends to be more expensive than new builds.
As you plan your property purchase in France, you should anticipate total transaction costs ranging from 10% to 15% of the purchase price. These costs encompass taxes, insurance, and various fees. Typical fees related to the mortgage itself, include:
Valuation Survey: Lenders may require a valuation survey, which typically costs around €250.
Mortgage Arrangement/Administration fees: These typically amount to approximately 0.5% to 1% of the loan amount, plus VAT.
Notary Fees: For a new property, these fees are around 2.5%, plus VAT, of the property’s value. However, if the property is older than five years, the notary fees increase to approximately 6.5% (plus VAT).

What documents are required to apply for a mortgage in France?

To successfully secure a French mortgage, it’s essential to have a property purchase agreement in place. Sellers often prefer to have confidence in your financial standing before proceeding further.
However, mortgage lenders offer a helpful option:a certificate of commitment. This certificate is a pre-approval letter and can significantly facilitate negotiations with the seller. It demonstrates your seriousness and readiness to proceed with the purchase.
Additional documents include:
1. Proof of employment: This can include an accountant’s statement or employment contract, depending on your type of employment, such as being a business owner, self-employed, or having a traditional employment arrangement.
2. Bank statements: Provide the past three months’ statements for all your accounts to demonstrate your financial stability.
3. Identification documents: Include a copy of your passport, which serves as proof of identity.
4. Current mortgage or rental agreement: The agreement for your current mortgage or rental property, showing your existing financial commitments.
5. Estimates/invoices from tradesmen: If you’re purchasing a new property or one that requires renovations, include estimates or invoices from tradespeople, along with their insurance certificates.
6. Loan deed or title deed: If you’re financing the property through an equity release or remortgage, provide the loan deed or title deed with a repayment schedule.
7. Marriage license: If applicable, include your marriage license as proof of marital status.
8. Preliminary sales agreement or property title: For properties under construction or improvements, provide the preliminary sales agreement or property title, along with the building contract, plans, building license, and land details.
9. Proof of income: Include documentation that verifies your income, such as dividends, pensions, etc. Self-employed individuals should provide three years of audited financials.
10. Proof of residence: Show evidence of your current residential address, which can include utility bills or official correspondence.
11. Sales agreement: Include the sales agreement for the property you’re purchasing.
12. Statement of assets: Provide a statement detailing your assets, which can include savings, investments, and other valuable holdings.
13. Tax returns: Submit tax returns for the past three years, demonstrating your financial history and compliance.

What is the maximum loan-to-value (LTV) ratio allowed for mortgages in France?

Banks usually provide loans that cover 70% to 85% of the property’s value. However, non-EU applicants might be required to provide a higher deposit to secure a mortgage.

Can non-residents apply for mortgages in France?

In France, mortgage options are available to both residents and non-residents. To qualify, you’ll need to meet specific income requirements and have a minimum deposit, with further details provided below. If you’re self-employed, you’ll be required to present audited accounts covering at least three years.
Lenders assess your credit history and current assets; some may have age restrictions. For instance, if you’re above the age of 65, you might encounter difficulties or face higher costs when seeking a French mortgage. It’s important to note that French mortgages are generally offered in conjunction with a property purchase agreement. However, in certain cases, you can obtain a certificate of commitment (known as “lettre de confort”) from a mortgage lender. These letters, valid for three to four months, reassure the seller of your serious intent as a buyer. Although not legally binding, they can positively influence the seller’s decision-making process.

What is the typical interest rate for mortgages in France?

Mortgage interest rates in France have steadily declined in recent years, reaching a historic low of 1.12% in 2021. This rate is less than half of what it was in 2014, which stood at 2.4%.
However, it’s important to note that interest rates started to rise towards the end of 2022, reflecting a trend across Europe as countries address high inflation concerns. At the end of the 3rd quarter of 2022, the typical mortgage interest rate stood at 1.57%.

How long does it take to get a mortgage approved in France?

Obtaining mortgage approval in France can be time-consuming, typically spanning around 12-14 weeks from start to finish. To streamline the process and prevent any unnecessary delays, it is crucial to ensure that all your documentation is well-organised and readily available.
By being prepared with all the necessary paperwork, you can help expedite the mortgage approval process.

Can a mortgage broker help me find the best mortgage deal in France?

Harrison Brook Mortgages are partnered with multiple French retail banks and Monégasque private banks depending on the property purchase price.
We understand that mortgages aren’t a one-size-fits-all kind of deal, so we place the utmost importance on determining your circ*mstances to get you the deal that allows you to live your best life.

Can I refinance my mortgage in France to get a better interest rate or loan terms?

When it comes to refinancing your mortgage in France, it’s essential to consider a few key points. Refinancing involves replacing your old loan with a new one, often to secure lower interest rates or reduce your monthly payments. However, it’s important to note that mortgage refinancing or remortgaging is not widely popular in France, and the associated costs can be high, resulting in limited product availability.
If you opt for a remortgage, be aware of additional fees such as administration costs, potentially higher interest rates, and early repayment fees on your current mortgage. Notary costs cannot be avoided, as including the new bank’s name on your documents is necessary. It’s advisable to carefully evaluate your options and assess whether taking out another loan to refinance your mortgage makes financial sense for your situation.
In France, refinancing allows for up to 80% of your property’s value, with a minimum loan requirement of €100,000. Banks typically require some form of guarantee, such as a sufficiently high annual household income, to qualify for refinancing. Remember that even if the new mortgage amount is smaller than the previous one, meeting the necessary financial qualifications remains a significant factor to consider.

Are there any restrictions on foreign property ownership when applying for a mortgage in France?

Foreigners interested in purchasing a property in France are not subject to specific restrictions. However, certain conditions must be met to qualify for a mortgage loan.