France

French mortgage loans

Introduction

If you are looking for a mortgage loan for the property of your dreams abroad, you might encounter some resistance from your trusted bank. If you think about it, from the banker's perspective, this makes total sense. If your bank is not active in France, they don't have the knowledge of the local housing market, they are not familiar with local legislation and even more, they will have a hard time to do any checks themselves. 

It should be clear that even if they agree to a mortgage loan, it might require additional costs. So be sure to check out the French alternatives too! 

How do these French loans differ?

To keep things short: they don't. Or at least, not that much. The only real differences are the procedure and the location where these loans are offered. Everything else works pretty much the same way it does anywhere else in the world:

  • There are dozens of configuration options:
    • Fixed or variable amounts/month
    • Fixed or variable duration
    • Fixed or variable rate
    • Options for early buy-out
    • Options to use part of the funds for construction costs
  • And the costs involved depend on parameters like:
    • Kind of rate you chose
    • Insurances
    • Duration of the contract
    • Period with a fixed rate or not
    • The total amount
    • Costs of deeds and procedures
    • Intended destination of the property (permanent or second home?)

The procedure to get a mortgage loan in France takes up more time than you might expect. Your personal situation will be subject to a rather extensive examination that can take up several weeks or even months. However, well preparing your case can significantly reduce the time required. 

Besides the peculiarity of the time-consuming aspect, another thing that may suprise you, is the way they handle the acceptance of a mortgage loan. After you receive an offer for a mortgage, you are obligated to think about it for 10 days (délai de réflexion). Only on the 11th day (after receiving the offer) you can accept the proposal from your bank.

Potential benefits:

  • Provisions that are used in French banks are typically lower than in most other countries (about 1%)
  • If the mortgage is included in the sales deed, you can avoid double notary/administrative costs
  • You might get a lower interest rate

Potential pitfalls:

  • Contracts and deeds are typically in French
  • Longer procedures

Do I need to make a visit to all the local banks?

You can, but you don't have to. There are companies that can request and compare different offers at once. If you are working with a real estate agent of relocation company, you can often ask them as well. Search for the service 'mortgage loans' in our partner section!