French Mortgages

Buying a property in France may be an attractive investment - as your main residence, as a 2nd residence for vacations, or to rent out as a source of income.

Property prices in parts of France are relatively cheap - certainly compared to the UK.  The population density in France is about a third of that in the UK - so the price of land tends to be less.  Demand for some property is less: more people in France rent rather than own their homes, and rural or isolated properties are less attractive for the indigenous population.

It is a legal requirement in France that mortgage lenders must take the affordability of any proposed new mortgage lending into account.  What this means in practice varies from lender to lender and according to your specific circumstances - typically no more than 33% of your pre-tax income should be required for all of your rent, mortgage, debt repayments and "contractual financial commitments".  However, this may be increased if you are a high earner.

If you rent out your property in France, you may offset the interest you pay on a mortgage for the property against the rental income for tax purposes.

You will need to take account of currency exchange issues.  If you do not borrow the money in Euros, you may need to pay up to 5% to convert what you have borrowed into Euros before you can use it for purchasing a property in France.  Currency fluctuations can work for or against you - the cost of converting currency will always be against you.

There may be regional variations on the proportion of a property value that can be borrowed against a mortgage - no more than 70% in some areas.

There is no requirement for a specialist lawyer, but you are strongly advised to seek professional help from someone who speaks French well and can offer advice on the French Legal system.

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