01 September 2011 - French Mortgage News | Partners News | Uncategorized |

French Mortgage Update

Over recent weeks the economic situation in the Eurozone has never been far from the headlines. Predications on how the European economy will fair in the near future are changing regularly along with expectations for the anticipated direction of interest rates in the region. However the old adage that ‘every cloud has a silver lining’ may be true for anyone considering buying a second home in France and financing part of the cost using a French mortgage!

The reason for this is that a number of French mortgage lenders have started reducing their interest rates on some of their fixed and cap and collar mortgage products – therefore reducing the cost of taking out a French loan.

There are a number of reasons why French mortgage rates have started to fall.

Growth expectations – most economists expect the Eurozone will now grow more slowly than previously thought. This means that interest rates will not need rise to offset the risks of higher inflation driven by increasing economic growth. Many market commentators believe that the next move in Eurozone interest rates could actually be down as the ECB looks to reverse the two interest rate rises seen earlier in the year in an effort to stimulate economic performance.

TEC10 index – The cost of fixed rate mortgages in France is determined by the TEC10 index which takes into account future expectations for interest rates. In line with the growth outlook mentioned above the TEC10 index has fallen – allowing the French lenders to reduce the rates they currently charge for their fixed and cap and collar mortgage products.

Protecting borrowers – The French lenders are trying to incentivize potential borrowers to choose mortgage products that they perceive to be of lower risk i.e. fixed and cap and collar products. These mortgages protect borrowers against any future rises in interest rates and provide peace of mind as to what your mortgage repayments will be in the future. This is one reason why lenders have reduced the rates they are offering on their fixed and capped products but not changed the interest rates on their variable mortgage products.

To give yourself the best possible chance of securing the lowest possible French mortgage rate why not register for our recently launched service – the IPF Rate Update!

Furthermore French mortgage lenders are also starting to improve their criteria for assessing whether potential borrowers are eligible for new loans following the significant changes to criteria that were introduced earlier in the summer.

There have been a number of gradual moves, introduced over recent weeks that will hopefully continue to improve the availability of mortgage financing in France to second home buyers during the rest of 2011.

To speak to one of the team today regarding your French mortgage requirements call us on +44 (0)207 484 4600 and remember we’re open until 19:00 Monday – Thursday, 17:30 on Fridays and between 10:00 and 14:00 on Saturdays. 

Found a property? Request a quote now or call +44 (0)207 484 4600