Get the best mortgage deals in France when living abroad

France combines it all - historic cities, rural vineyards, and vast sandy beaches. If you are looking to buy your next property, be it an apartment in the ambient city center of Paris or Lyon, or a villa near the sandy beaches of Biarritz or Côte d'Azur, you have arrived at the right place to get an overview of your mortgage financing options.

If you are a part of the 2 million French expat population living scattered across the globe, it is also worth mentioning that you can be eligible for better terms for a cross-border mortgage. Read on to learn more about non-resident mortgage terms in France, or get in touch with our team to get the process started immediately. 

What you should expect when applying for a mortgage in France

When being a non-French resident, banks will apply more scrutiny to your application and require more thorough documentation before granting a mortgage. This is to solidify that your economy is stable and assure your capability to repay the loan in accordance with the financing agreement.

The first and foremost factor affecting your mortgage terms is your country of residence, which in most cases also dictates the currency in which you earn your income in:

1. Applicants living in the EU can get up to 80% of the property purchase financed.
2. When living outside of the European Union, banks most likely will finance 50% of the value, but you can find yourself getting a higher LTV if you are a French citizen living abroad.

Other mortgage terms include:

• Max 30 years of repayment time 
  • Non-residents might not be eligible for the max period in all cases.
• Maintaining a debt ratio of 35% (French law dictates a maximum of 30% but banks tend to require a higher buffer). 
  • Your debt ratio is calculated as the amount of free cash flow you have remaining after deducting all monthly loan payments from your monthly salary.
• Purchasing a life insurance in France covering 120% of the mortgage and naming the lender as the beneficiary.
• Getting a property insurance.

Also bear in mind that your application documents will likely need to be translated into French, but some lenders accept English translations or originals. Homevest has a solution in place to accommodate this without any added effort from your side.

Types of mortgages in France

There are three types of mortgages available for financing property in France - property lien, institutional guarantee, or a conventional mortgage. Non-residents will almost without exception be offered the conventional type including a necessity to include a notary (charging around 2% of the mortgage value) that ensures that all terms of the mortgage are met by the applicant and lender.

In terms of interest repayments, French lenders can offer three types:

1. Fixed-term mortgages are paid over 6-30 years. 
   • These can be denominated with either a variable interest rate or a fixed interest rate, the latter being more common.
2. Interest-only mortgages allow you to only pay interest throughout the mortgage term followed by a balloon payment of the full principle amount at maturity. 
   • These kinds of mortgages are less common in France and the criteria for qualifying tend to be higher than for regular fixed-term mortgages.
3. Bridge loans of up to 2 years for customers needing financing for a new property whilst still owning their previous one.
   
   If you now find yourself wanting to explore your mortgage options for a property in France, please leave your information and Homevest will take it from there.