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Buying in France, what do I need to know?
We deal with all the French banks, the UK banks that operate in France and a number of European investment banks. Working with so many banks allows us to offer you the best deal, whatever your circumstances.
After years of operating in France and due to the volume of business that we introduce to the banks, we regularly negotiate lower interest rates and fees than you would normally be offered.
What type of property can I get a mortgage on?
We can arrange mortgages for individuals or companies to buy main homes; second homes; rental or investment properties; leaseback properties; off-plan properties and commercial properties.
Equity release mortgages are available.
What currency will my mortgage be in?
All French banks will provide mortgages in Euros, but we can also arrange mortgages in other currencies such as US Dollars, Sterling and Swiss Francs.
What is the maximum loan amount (LTV%)?
Depending on the valuation of the property, or purchase price, non-residents can borrow up to 85%. All mortgages are subject to income but some banks will also take rental income into consideration.
What is the minimum loan amount?
The minimum loan amount that Somerset Mortgages will consider is €75,000.
How long is the term of the mortgage?
The mortgage term can be from 5 - 30 years.
How much will the bank charge me?
Generally the banks will charge you a 1% arrangement fee, however we will negotiate on your behalf to reduce this.
Do I need life assurance?
Yes, life assurance is mandatory. We can help you arrange this at minimal cost.
Which mortgage types are available?
Both capital repayment and interest only mortgages are available for both purchase and equity release.
Interest rates
The interest rate will depend on the currency of the mortgage. For example, if a Euro mortgage was selected then the EURIBOR (European Interest Offered Rate) would apply, plus the bank's margin. Buyers should be aware that many advertised rates for French banks are only applicable for the first 3-12 months of the mortgage. Rates are available from 3.4%.
Fees and Taxes
Estate Agent Commission - Varies from 4% - 12%. Details should be available in the agents Mandat (Authority to sell) from the seller.
Notaries Fees - Allow 1% - 2%
Mortgage Registration Fee - 1% - 2% to register the lenders charge against the property.
Stamp Duty - 4.8% on properties over five years old
VAT - taxe sur la valeur ajoutee (TVA) on new properties 19.6%. This can be reclaimed with a Leaseback property.
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Whenever buying a property overseas, we recommend that you seek professional tax and legal advice.
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