Moving to France? Now could be the time to buy your French property
French mortgage rates being offered to British buyers of French property have dropped to their lowest rates, since the end of the Second World War.
The best deal on a 20 year fixed rate mortgage is now as low as 3.35pc, according to French Private Finance. If you are in the market for a tracker mortgage these are available for as low as 2pc.
This means that the cost for a €100,000 loan would be €572 (£482) a month based on the fixed-rate deal.
These low rates are being attributed to “fierce competition” between banks to land the best applicants driving down the borrowing rates.
A spokesperson from French Private Finance commented: “With such low rates it is now much easier for investors to find self-financing properties, especially in central Paris and the Alps. Seasoned investors understand that these rates won’t be around for long so they’re trying to capitalise now.”
He said the buyers were mostly investors or those looking for holiday homes and that the typical buying price had jumped up significantly in recent months.
However, Telegraph Money advises that whilst French property prices can often appear very low compared with UK property it may not always be the investment it appears to be.
They recommend that the true value of a property market can be estimated by matching property prices against salaries and – similar to understanding the earning potential of a business – you can understand the earning potential of homes, when these values are plotted against the historical norms.
When using these measures, French property is the most overvalued in Europe – 50pc too high against rents and 35pc compared to wages, according to the most recent Economist house price index.
In summary their observation is that while servicing a French loan may be cheap, it doesn’t mean the French property is when compared with its market value. However, if you are moving to France from the UK, there is no doubt that your money can go a long way outside of the property hotspots.
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