Taking out a Mortgage in France

Buying a property in France is similar to purchasing a property in most other countries.  Most buyers take out a mortgage that typically covers up to 80% of the value of the property.  If you’re planning to purchase that second home in France, or even a primary residence, you can either take out a mortgage from your home country or from a French mortgage company in France.  If you decide to take out a French mortgage, here are some of the basic points you should familiarize yourself with before taking out that loan.  

Size of loan
French mortgages normally cover up to 80% of the property’s price, with some loans even amounting to more than 80% of the property’s value.  How much of a loan you receive depends upon your overall monthly long-term loan amount (combining all mortgages, etc.) compared to your monthly gross income.  Your total monthly long-term debt should not exceed 30% of your total monthly gross income.  For example, if your current monthly mortgage on your home is £1000 per month, with a total monthly gross income of £6,000 per month, you will be eligible up to a second monthly mortgage payment in France of up to £1000 per month (assuming you have no other long-term debt).  

Types of loans
You can either apply for a fixed or variable loan.  Some mortgage companies even offer an interest only loan for the first few years of the loan term.  Check and compare rates from a few different mortgage companies to get the best rate possible.  Mortgages are anywhere from 5 years to a 30 year mortgage.  

Length of approval process
Mortgages usually take from anywhere from about six weeks to three months to approve.  That process can be accelerated if you start the approval process even before you find that house to buy.

Additional costs
Additional fees add up to about 8 – 10% of the purchase price.  This includes the notaire’s fees (lawyer’s fees, around 6%), an upfront mortgage fee (around 1% of the loan), registration fee (1 – 2% of the loan), and life insurance (about 1% of the loan).   If you hire a real estate broker, you will have even more fees to pay; however, those fees are often included in the price of the house.   


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