Covid-19 and French Mortgages

How has Covid-19 impacted France and French mortgages?

Western Europe detected the first cases of Covid-19 in February and by mid-March France was in lockdown. Since the end of May, the lockdown was partially lifted with residents hopeful to get back to life and business. Health authorities warn we may not be out of the woods yet.

How did this affect rates?

French mortgage rates reach all time lows in 2019 and 2020. Mortgage rates for 20-year fixed rate repayment mortgages were around 1.5%, sometimes lower for resident buyers. As of the time of this article, rates remain low. Our bank partners tell us they don't expect any major increases for the time being.

We have continued to obtain loans for our clients but due to organizational difficulties with banks trying to get access to employees working from home, delays have been longer.

The biggest change is that French bank underwriters are very cautious about lending to employees working in the sectors of the economy most heavily impacted by the Covid slow down such as tourism and travel.

Home prices have softened a bit with the economic stall but the main impact is lack of transactions – sellers waiting to sell and buyers waiting to buy until a sense of back to business returns.

French banks are at last embracing modern technology!

One very welcome effect is French banks and Notaires have embraced technology which has long been available but was conservatively resisted. Zoom meetings are accepted in place of in person and finally digital signatures are becoming the norm.

So far so good – if you have a project to buy or borrow in France, don't hesitate to get in touch!

Posted August 5, 2020