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    • French Market Trends
      Aver loan rates 3.70%
      Aver bank margin 2.10%
      Aver house price +6.5%*
      French inflation rate 2.30%
      ECB base rate 1%
      3 month Euribor 1.13%
    TEC 10 3.13%
    *Change based on prev monthly rate

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    • March 2010

      Buy of the month Purchase of a classic French <<Maison de caractère>>.

      Emily, from London, fell in love with a presbytery renovation project in the middle of France in an area she knows well with a purchase price of €85,000.

      Emily chose a 25 year fixed rate at 4.35% through Athena Mortgages for this her first ever purchase, putting down €25,000 to cover deposit of €17,000, purchase taxes of €6,400 and fees of €1,600.

      Her monthly payments for the mortgage €69,840 are €388 with life assurance payments of €17.

      Long term fixed rates like this are common in France. It is important to note that there are always early repayment penalties for fixed rates which are usually half the interest rate on any sum you pay off early.

    • February 2010

      Capped payment mortgages for investors

      Since the beginning of the year we have had a large volume of investors buying leaseback properties all over France. Whilst interest only products for these sorts of purchases have been popular in the past, many investors are now choosing repayment products for their leaseback properties as current rates are so low.

      One of the attractions of taking out a French repayment mortgage is that the monthly payments on these mortgages are usually capped in some way, giving security. Whilst 25 year fixed rates are available at about 4.5%, variable rates are 2.4% for this duration, making the headline numbers for investments with 4% yield look very manageable.

      For example one of our partners has a leaseback with a household name management company where a 5% deposit will get you a property of €300,000 on a repayment basis over 30 years with a monthly payment after rental income is taken into consideration of less that €100 per month. This payment will remain more or less fixed as both the rental income and the monthly payment increase by the rate of inflation.

      If you put your deposit and €100 into a savings account you would need an average rate of return in excess of 10% per year to get close to the a rate of growth in the value of the property at 2.5%. Interesting eh?