French Mortgages in St Tropez, the Cote d’Azur, Provence and Monaco

Alongside the capital city of Paris and the ski resorts in the Alps, the French Riviera is one of the most iconic destinations that France has to offer. The region boasts of breath-taking landscapes in Provence and stunning beaches in the Côte d’Azur. The French Riviera attracts affluent visitors through the charm of St Tropez, the peaceful vineyards around Aix-en-Provence and the international film festival in Cannes. This popular region of France draws buyers from all over the world.

With such an array of geographical and cultural attractions, the interest in the property market in this region is predictably strong. It is also diverse, comprising of renovated farmhouses and modern villas in inland Provence, luxury apartments and townhouses that are overlooking ancient harbours of the Côte d’Azur and it consists of some of the highest property prices worldwide, in Monaco. Given the interest of the area, the properties in the most sought after locations have tended to hold their value despite the economic turbulence of recent years. As a result, the range of French mortgages in St Tropez, the Cote d’Azur, Provence and Monaco available to international property buyers in the region is equally large and an example of what is on offer can be viewed in our French mortgage latest rates table here.

It is possible to find beautiful, detached 3-4 bedroom villas within half an hour of Cannes for prices under €500,000  and even less in areas such as Var. This proves that you don’t need to be a millionaire to enjoy this region.

Certain areas such as St Tropez have an extremely limited supply of properties available which generates a very competitive property market, so unique that the banks are desperate to gain exposure in it.

Financing options in Provence, the Cote d’Azur and Monaco are available via both retail and Private Banks. In terms of Private Banking options the Cote d’Azur between St. Tropez and Monaco is certainly as popular as Paris in terms of the number of Private Banks that will consider taking security against property.

Before the credit crunch a number of International Private Banks would consider lending against property in the Cote d’Azur however almost all have now pulled back from this market. As you move further towards Provence a reduced number of Private Banks will consider lending against property, however there are still a wide range of options available.

The Private Banks offer greater flexibility in terms of how they assess affordability and the structures to which they will lend. However they are not interested in just lending money to a client – they are always looking to develop a wider, Private Banking relationship whereby they can manage financial assets on the client’s behalf.

Although these private banks may be more flexible for borrowers, sellers in the most sought-after areas will drive a harder bargain. Due to the competitive nature of the property market, they may even refuse to insert a clause suspensive into the purchase contract. This clause would usually allow the potential buyer to walk away if they are unable to finalise a French mortgage for the purchase.

In the absence of such a clause, the best advice to buyers is to ensure that you are fully pre-approved by a French lender before agreeing to the purchase. The only thing that may then trip you up would be the lender’s property valuation but, given the strength of property prices in the area, it is very unlikely that this valuation would come back unduly low.

Private banks may be less willing to provide mortgages for properties found outside of the most sought-after locations. But this does not mean that the rural market is particularly weak. More so than for elsewhere in France, buyers may find that existing property owners all around the French Riviera are sticking to their guns and refusing to budge from their asking price. This nevertheless points towards a sound property investment and, thanks to the international reputation of this area; a property with easy access to the French Riviera is certainly unlikely to lose its value anytime soon.

With property prices in this area of France being so high many of our clients consider having a French mortgage secured against their property as part of a wider financing and tax planning strategy rather than just for affordability purposes.

Important points to consider:

Here are a number of factors to consider if you are thinking of using a French mortgage or finance facility to purchase a property in the French Riviera and its surrounding area.

1. First and foremost, the fact that you are buying in this region immediately makes you a strong mortgage candidate for French banks, due to the reliably good performance of the property market. You should therefore have a good selection of retail banks and their products to choose from.

2. If you are buying in a location with a particularly competitive property market (St Tropez, Cannes) be prepared for tough negotiations. Think to apply for an agreement in principle with a bank, so that vendors can see that you are a serious buyer who can move quickly.

3. Private Banks are prepared to provide residential mortgages in these most sought-after destinations. Explore all the available options, which may extend beyond the standard, credit-only mortgages.

4. There can be financial planning benefits to having a French mortgage secured against your property. A professional tax consultant will be able to outline the benefits with respect to wealth tax and offsetting rental income against mortgage interest.

5. Underwriters will not take into account your potential rental income from a property when assessing your French mortgage application.

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