07 February 2018 - French Mortgage News | International Mortgage News | Partners News |
Make it pay! How to get free skiing holidays and a second home in France with a French Mortgage
You can’t fool us, you must admit that the excitement of discovering new a ski resort every year loses its appeal soon after the kids arrive! We’ve all been there, dragging what seems like the entire contents of your loft onto the airport bus, and off again; up to Departures, to find you’ve left the ski poles/Trunki/car seat in the car. And don’t ignore the frustration you feel when you realise you need to book next year’s holiday before you’ve even had a chance to enjoy this one just to secure the accommodation in the school holidays. Suddenly, the thought of having your own base in the Alps, where you can store your kit all year round and use it when you want it, starts to sound appealing. Especially, since you can even make your holiday home pay for itself (plus a few additional holidays on the side)! The low French Mortgage rates, high loan-to-value and interest-only products coupled with the impressive rental yields that can be made in the popular resorts and that prime real estate in the French Alps is predicted to increase in value, mean that the economics of owning your own place soon start to work.
And we are certainly not the only ones to have done the maths! February is one of our busiest times for enquiries as our clients head off to the slopes and peruse the estate agent windows in resort. Only last week we had a client complete on his dream house in Chamonix:
“After visiting the area multiple times over the past 12 years, we felt that it was a relatively stable, in-demand investment area that will hold its value well and offered year-round rental opportunities. In fact, with the current uncertainties around Brexit and its future impact on the (very expensive) London real estate, we felt it more prudent to invest in France.”
In order to demonstrate how obtainable owning your own French property is with the French mortgage rates and products currently available we picked a four-bedroom chalet in Les Gets that is currently available to buy for €610,000. Borrowing at 75% loan-to-value at 2.5% on an Interest-only basis over 14 years would give you a monthly French mortgage payment of €953*. When you consider that chalets in the likes of Les Gets, Morzine, Meribel or Tignes will easily rent out for over €3,000 a week over the winter and over €1,000 in the summer, it becomes clear that your holiday home can quickly become a nice little earner, and that’s ignoring any capital increase that you may well benefit from if you decide to sell it in years to come. Yes, there are costs involved with maintaining a second home and managing the rentals, but even taking all of those into consideration, you would only have to rent the property out for 10 weeks a year to cover all the costs including the mortgage payments! (The average ski season in France is 19 weeks long, leaving you plenty of time to enjoy the snow yourself).
The example above was based on a high loan-to-value; for those of you lucky enough to be receiving a bonus this month, there are even better rates available (from 1.5% for non-residents) if you can put down a larger personal contribution. If you could stretch to a 50% deposit on a €610,000 chalet, your annual mortgage payments could be as low as €4,500*. When you consider you would pay at least €7 – €8,000 to rent the same chalet on a self-catering basis for two weeks at Christmas and one week at February half-term, it is evident, that for savvy investors, buying your own French ski property makes sense. Now, all you need to do is decide where! (And be quick, as there is still chance we could get you in before the last of the snow melts!)
*French mortgage rates and LTV is dependent on an individual’s personal and financial circumstances. Please contact us for a thorough assessment of your situation so we can advise you on which products you would be eligible for.
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