07 December 2017 - French Mortgage News | International Mortgage News | Partners News |

French Mortgage Rates are falling as fast as the Alpine snow!

In early November, the Bank of England made the headlines when it announced the first UK interest rate rise in ten years. Since then, the press has been full of analysis about what the higher base rate will mean for borrowers and savers alike.

It may also have led you to wonder whether French mortgage rates are also going to increase. Well, we’ve got good news for you! So far, quite the opposite has proved to be true. Here at International Private Finance, our partners at French banks have confirmed that they are reducing their rates even further.

The latest cuts to French mortgage rates is great news, however we still advise caution, as it does not mean that they will keep falling over the upcoming months and years. In general terms, the Eurozone economy is performing solidly and speculation is mounting as to when (rather than if) the European Central Bank will follow the Bank of England’s lead by reducing their quantitative easing programme and raising interest rates.

Fortunately, the French mortgage market is full of very affordable products that protect the borrower against the prospect of rate rises. Fixed rate mortgages are very popular in France, and one of the most popular options among French buyers is to take out a mortgage that is fixed for the duration of the loan. This means that your mortgage does not become variable at any time, a product that tends not to be available on the UK market.

To illustrate how attractive fixed rate French mortgages can be, here is a comparison of two competitive UK and French mortgages that are currently available on a repayment basis:

UK mortgage (currently available via a UK high street lender)

  • Loan amount: £250,000
  • Maximum loan-to-value: 80%
  • Term: 20 years
  • Rate: 1.99% fixed for 5 years
  • Rate after fixed period: 3.69% (Lender’s current variable rate)

French mortgage (currently available via IPF)

  • Loan amount: €250,000
  • Maximum loan-to-value: 80%
  • Term: 20 years
  • Rate: 2.15% fixed for the duration of the loan
  • Rate after fixed period: N/A

For the UK mortgage, the estimated total amount that you must pay back (including the amount borrowed) is £333,488.60. This is nevertheless dependent on the movement of the interest rate, which is expected to rise further in the years to come.

On the other hand, if you take out the French mortgage, you are guaranteeing that your rate will not move over the term of your loan. From day one, you can therefore budget that your mortgage is going to cost no more than €307,810.74. This represents a considerable saving on the UK option, even before you take into account the potential interest rate rises in the UK.

To help you find out more about how a French mortgage may save you money, our website has a host of tools and information.
These include:

Alternatively, to talk through your plans, call the team today on +44 (0)207 484 4600 or complete our online quotation request form here.

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