Remortgage your French property
Take advantage of the current low interest rates in France. You can refinance your French mortgage to get a better interest rate and lower your monthly payments.
In France you can refinance up to 80% of the value of your French property with a minimum loan amount of 100,000 euros. Many banks require an annual household income of 50,000 euros or more to qualify. Please note that we are not able to offer refinance for leaseback properties.
The first step is to have an estate agent provide a conservative valuation of the resale value for your French property. Most mortgage providers will not look at your file unless you have already taken this step. It's important to ask the agent to be conservative as the lending bank will send their own valuation agent to look at your property later in the process.
There are also transaction costs to plan for when considering if your current property value is high enough for the project to make sense.
- Prepayment penalty on your existing loan - check your loan offer to see if this applies, the maximum any French bank can charge is six months interest on the amount repaid, not to exceed 3% of the oustanding capital.
- Notary costs - in most cases, a French notaire must change the charge registered on the title of your property from the old bank to the new bank, the cost of this tends to be about 1.5% of the new loan amount.
- Bank and broker fees - this will depend on your specific project and the bank chosen, plan on 1.5% of the new loan amount for estimation purposes.
Example
Value of your French property = 450,000 €
Outstanding balance on your existing French mortgage = 337,500€
Prepayment penalty on your existing French mortgage = 8400€
Notary costs = 5250€ (not able to finance - to be paid out of pocket)
Bank and broker transaction costs = 5250€ (not able to finance - to be paid out of pocket)
Total to refinance =345,900€ (77% of property value)
As we have not surpassed the maximum 80% of current property value allowed, this project is possible.
Please note that even if the new mortgage payments are less than the previous payments, you must still financially qualify for the mortgage. The French bank will consider your debt to revenue ratio, your net assets and your monthly disposable income.
