Our client, a retired GP, wanted to buy in France. He had the means to buy in cash but in doing he would significantly increase his tax liability. However, he was unsure whether a French mortgage would be an option, as raising finance in the UK based on retirement income can be tricky.
We explained to the client the benefits of a french mortgage:
- It mitigated the exchange rate by lowering the amount they needed to transfer in Euros from GBP
- They didn’t need to sell or raise finance on their UK house, which they wished to keep for their university-aged children (and raising finance in the UK based on retirement income would have been tricky)
- It reduced the amount they needed to divest from the pension fund, thus ensuring that he did not go over the tax-free threshold and ensuring it work hard for them at an expected return of 5%
We were able to obtain a French mortgage at a 75% LTV, based on our client’s retirement income.
- Interest-only product which can be repaid at any time without incurring any ERC. This allows the client to decide when they are ready to sell their UK home, and hopefully benefit from a stronger GBP
- Rate of 2.25% fixed for 7 years, then 3.2% capped variable for the following 7 years
- We negotiated a waiver on the “mandatory life insurance” requirement, which considering the client’s age would have added a considerable sum to their monthly outgoings.
“We have just completed on a house purchase in France with the assistance of IPF and wanted to say that throughout this process they have been exceptionally professional and helpful. Without their knowledge and efficient support, this purchase may not have happened!”