French Mortgage Finance

At Leisure-Invest we can offer purchasers a complete investment package including competitive mortgage options for non French residents, all the loans we can arrange are offered by major French banks and lending institutions. In addition we work with several specialist brokers who will search the widest market to offer you the best deal possible. Borrowing money in France to buy a French property can be both cheaper and more tax efficient than raising the finance elsewhere, however it can still be an option for many people to raise finance secured on their property in the UK especially for those who may not be able to prove their income to the satisfaction of the French lenders. In this case we can put you in touch with a UK based broker.

In addition to arranging the mortgage on a purchase we can also provide our customers with a French bank account so that they have all the necessary tools to manage their investment. We do not charge a brokers fee for our direct mortgage service, however the brokers we deal with may charge a small fee. At present we are able to arrange loans that fall into the following categories: However the situation is very fluid so please check with us.

1. 80% repayment - subject to status the bank will lend 80% of all the funds required to purchase, so the price plus the notary fees, taxes etc which amount to around 5% of a new build property. These loans are on a repayment (capital and interest) basis only, a typical fixed rate is 5.25% and this can be fixed for the entire term of the loan. At the end of the term you will have paid back all the capital borrowed and be left with a debt free income producing asset. In the case of purchasing a leaseback property where you receive the Vat refund you will be required to use this to reduce the initial loan amount, e.g. the bank will in effect bridge your vat payment on this type of investment.

2. Simple Interest Only - the bank can lend up to 80% of the purchase price (excluding Notary fees) on an interest only basis, a typical fixed rate is 5.5% with a maximum term of 15 years available. If you go for a variable rate they can start at 5%. At the end of the term you will still owe the full amount of capital borrowed, however if capital growth was strong over the period of the loan then at the end of the mortgage term your asset value could be far greater than the outstanding debt.

This mortgage is well suited to a leaseback investment as the bank lends based on the VAT inclusive price, meaning when you receive the VAT refund (which you can keep); you have borrowed around 96% of the net price of the property.

3. Combine and save - here the bank can lend over a 25 year term split into 2 periods, one interest only and the other repayment, e.g. 10 + 15. This can help keep mortgage costs low at the outset, then having the option of repaying the loan by way of selling the property at the end of the 1st period or converting to a repayment mortgage over the remaining term. At the end of a 1st period of say 10 years the rental income you receive from a property bought 10 years earlier should be significantly higher and thus make capital and interest repayments easier to manage. The maximum loan to value on this loan is 100% of the purchase price and all costs, however during the interest only period the bank insists that a minimum 20% of amount borrowed is placed in an savings and investment plan, this capital should attract interest in line with current returns and can be used to reduce the outstanding capital at the end of the interest only period. A typical rate is 5.5%. In the case of purchasing a leaseback property where you receive a vat refund you can keep this, e.g. there is no requirement to use this to either pay back capital or add to the savings account

All mortgages are FULL STATUS and evidence of income will be required, in case of employment that is a recent P60 (UK and Eire) , 3 last payslips and 3 recent bank statements, for the self employed a minimum of 1 years tax returns are required and it is usual for the banks to request additional information regarding your income. Lending decisions are based on affordability, however when buying an investment property the rental income produced will be taken into account. If you are unsure about your suitability for a loan then please talk to us, we will be able to quickly assess the options open to you.

To find out more about financing or to receive a guideline quotation please contact us by telephone or email.