17 May, 12

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French Interest Rates

We receive monthly updates on the Rates of Interest charged by the Lenders on French Mortgages and pass this on to you.

French Mortgage Interest Rates

  • Interest Only Mortgage Ratesfrench interest rates and mortgages in France
    • Remember that you are only paying the interest on these mortgages and that you need to consider that at the end of the term you will need to repay the Capital.
    • Some lenders have what`s known as a bond mortgage where they place 20% in a bond to repay the whole loan at the end of the term.
  •  French Variable Interest Rates
    • These rates are based on the 3 monthly Euribor Rate which is similar to what is known in the UK as the LIBOR Rate.
    • You will have a 3 monthly or 12 monthly fixed period and there after it`s on a 3 monthly fixed period.
    • Different banks have what they call a spread which is the amount they charge above the Euribor Rate.
    • This rate is important as some banks will entice you to a special offer which may only last 3 or 12 months and then you will might have a shock.
    • The spread can be as low as 1% to 5% above the Euribor Rate.
  • French Fixed Interest Rates
    • These can be fixed for a period from 1, 5, 7, 10 or the whole duration of a Mortgage
    • It is also important that you understand that when taking out a fixed term that this facility has redemption penalties where as the variable rate has no redemption fees.
    • This redemption fee is 3% with all French Lenders.interest rates in france
      • EXAMPLE:
        • Lets say you have taken out a 25 year mortgage with a 10 years fixed period and you redeem your mortgage in year 11.
          • This being the case you will have a zero redemption fee as you should then be on a variable rate.
        • If you have a fixed 10 year period and you redeem your mortgage in year 9
          • This being the case you will have a fixed penalty of 3% on the outstanding loan.
    • If you are only considering keeping a property for say 3 or 4 years then this facility needs to be reconsidered.
  • French Equity Release Mortgages
    • Unlike UK, this mortgage is as it states, an equity release and should not be mixed up with a UK equity release Mortgage known in France as a Lifetime Mortgage
    • You can release equity from your property
      • To buy another propertyfrench mortgage lenders rates
      • To repay your UK mortgage
      • To buy a boat or car
      • To renovate or construct
        • Note that you will need quotes called Divis from a French Registered Builder to do this. You will not be paid to do this work yourself or by a friend
    • You can also get an equity release to buy out a partner or settle a divorce

French Interest Rates

FRENCH MORTGAGE LENDING RATE

Program

Fixed Period

Rate

LTV

Amount
Interest Only Currency Mortgages 3 Months 2.78% 50% €500,000
Interest Only Euribor Mortgages 3 Months 2.45% 80% €100,000
Capital & Repayment Euribor Linked 12 Months 3.95% 85% €  50,000
Capital & Repayment Euribor Linked 48 Months 4.50% 80% €  50,000
Interest Only Euribor Linked 48 Months 4.50% 80% €  50,000
Capital & Repayment Fixed Fixed Rates 300 Months 5.45% 80% €  50,000
Construction Finance 24 months deferred 3 Months 3.45% 100% €  50,000
Land Loans 3 Months 3.45% 50% €  50,000
French Bridging Loans 24 Months 3.85% 70% €  50,000

Euribor Rate

The interest given above are true and correct on the day of publication

The French Interest Rate is linked to the Euribor Interest Rate and can increase and decrease on a daily basis. Every lenders has what they call a spread which is between 1 and 4% so the rate you initially see may not be the rate you end up with as the low rates are special rates to entice you and after 3 or 12 moths you may end up with a far higher interest rate.

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