Notes :

1. Rates & repayments quoted are Fair representations as at 24/05/2010 and are dependent on client's criteria
2. Monthly repayments are indications for a repayment mortgage per 10,000 €
3. Rates and monthly repayments are subject to status
4. Terms, rates and repayments are indicative and non-contractual
5. Murcef law 11.12.2001 "No payment of any kind may be demanded from a person, before obtaining one or more loans of money".

 

Know your Rates

France is traditionally a fixed rate market (i.e. fixed rate for the life of the loan). This is mainly due to the fact that real estate prices have remained relatively steady in the past and have not known the considerable hikes in prices that we have seen year after year in the UK/US markets. That means that with a less speculative market, purchasers can get more easily on - or up - the property ladder. It also means that purchasers have needed to capitalise during the course of the loan, as there is less chance of recuperating a major profit on resale. Interest only loans therefore (in France: “In fine”) have up until now attracted mainly investors.

In recent years fixed rates in France having been as low as 3,5% (2005) French buyers took out a fixed rate mortgage for 20/25 years, and then could afford to forget about it. Even recent rates which on the home market have varied around 5% remain sufficiently affordable for borrowers to commit to on a long term basis.

Fixed rates – fixed for the duration of the loan so you have the security of knowing exactly how much you will pay each month
Variable rates – based on the Euribor, banks apply the 3 month or 1 year Euribor plus their margin. Loans may include an initial fixed rate of 3 months, 1/2 years or more. Also available is a variable rate on the Swiss Libor.
Capped variable rates – security capped by 1 or 2% which limits exposure to higher interest rates.