French Mortgage update 2024 Q1
As we enter the New Year in 2024 with renewed optimism, the French mortgage market reflects this positive sentiment with exciting updates. Let’s dive into the latest trends and opportunities for financing your dream ski property in the French Alps. Send us your details here.
Market Update: A Turn for the Better
Interest Rates: A Welcome Decline
- Previous Rates: Around 5.20% for 20-year repayment mortgages.
- Current Trend: Rates now fall between 4.40% and 4.99%.
- Significant Drop: Notable reduction, with a leading lender cutting their 19-year rate from 5.27% to 4.50%.
This downward rate trend sparks hope for further reductions, offering a promising start to the year.
Innovative Mortgage Products: Variable-Capped Mortgages
- The Concept: Combines the benefits of variable rates with a safety cap.
- Advantages: Flexibility and security, with a cap on potential rate increases.
- Calculation Basis: Euribor 3 – 12 months + margin + 1% cap.
- Current Offers: Rates starting at 4.32%, capped at 5.32%.
This product is ideal in the current financial environment and has already been adopted by some lenders.
Send us your details here.
Loan-to-Value (LTV) Updates
- Maximum Offer: Up to 85% LTV for repayment mortgages, fixed for up to 25 years.
- General Range: Typically between 70% to 80% LTV.
- Deposit and Collateral: A minimum of 30% deposit, plus additional “cash” collateral for better terms.
Understanding these parameters is crucial for prospective buyers.
Rates Update: A Closer Look
- Good News: Rates have been reduced by up to 15% in just one month.
- Current Range: 4.40% to 4.99% fixed for 20 years on a repayment mortgage.
This significant decrease is good news for those looking to invest in the French Alps.
Market Overview: A Snapshot
- Euribor 3M Trends: A slight decrease has been observed over recent months.
- Currency Exchange Rates: Essential for international buyers to consider.
Staying informed about these factors is key to making a wise investment decision.
Send us your details here.
Recent Case Studies: Real-Life Examples
- Saint-Gervais, Haute Savoie
- Property Price: €392,000
- Loan: €300,000 at 4.32% variable cap, 76% LTV, 15-year term.
- Alpe d’Huez, French Alps Isere
- Property Price: €850,000
- Loan: €680,000 at 5.19% fixed, 80% LTV, 25-year term.
These cases illustrate the diverse options available in the market.
Available Rates: Detailed Overview
Repayment Mortgages
| Interest Rate | Term | LTV | Collateral/AUM |
|---|---|---|---|
| 4.99% fixed | 20 | 70% | 6 monthly payments |
| 4.32% variable cap | 20 | 80% | €30,000 |
| 4.50% fixed | 19 | 80% | n/a |
Interest-Only Mortgages
| Interest Rate | Term | LTV | Collateral/AUM |
|---|---|---|---|
| 4.87% fixed | 10 | 100% | 40% |
| 4.25% fixed | 10 | 100% | 50% |
| 4.90% fixed | 7 | 75% | n/a |
Send us your details here.
General Borrowing Guidelines
Repayment Mortgages
- Rule of Thumb: Borrow up to 5 times your individual or combined income, minus existing mortgage balances.
- Key Consideration: This rule is adjusted based on specific bank criteria and personal financial situations.
Interest-Only Mortgages
- Borrowing Potential: Up to 10 times your income, accounting for outstanding mortgage balances.
- Key Requirement: Must possess net assets (excluding your main residence) equal to the mortgage value.
- Example: For a €1 million interest-only mortgage, have at least €1 million in assets.
The New Year brings encouraging developments in financing options for ski properties in the French Alps. From reduced rates to innovative mortgage products, there’s much to be optimistic about. As always, we’re here to guide you through your investment journey.
Send us your details here.
