FINANCING PROPERTY
Getting bank loans in France
Depending on whether you are resident or non-resident, the amount you can borrow and the conditions vary.
For French residents, including foreigners who are tax resident in France, you will get the most advantageous conditions in terms of the maximum amount a bank will lend. Banks will lend 80% to 90% of the value of the property and if the monthly repayments do not exceed about one third of your net income. But this financing does not cover notaire fees, that are around 8% of the total cost, so best is always to assume you will need about 20% in cash to buy a property.
For foreign residents from the EU and the certain countries not in the EU like Norway, UK or Switzerland, the maximum you can get is 80% of the property value, so with notaire fees, best if is to assume you need 30% cash to buy a property.
For residents outside of Europe, from Asia, Australia or America, the maximum amount you can get via bank loans goes down to 50%, so if you need more finance, buyers from these countries should look at getting finance from their own country.
U.S. are an exception, as almost no banks cover tax residents from the US due to stringent tax obligations imposed by the IRS.
There are a small number of banks and brokers only that deal with non-residents, so contact Smartfinder Home and we will pleased to put you in touch with them.
Interest rates vary over time and loan periods, and recently they have gone from as low as 1-2% to around 4% in 2024, but they are slowly beginning to go down in line with the reduction in inflation. And loans periods vary from 8 to 25 years, with a cap for older borrowers that must finish repaying the loan at 75 years of age, although some banks can go above that limit.
Useful to know is that French banks will prefer buyers with stable incomes, rather than entrepreneurs, unless you have a track record of at least 3 years history of French tax declarations.
Other forms of financing to buy property
Here are 4 other ways you can finance your property purchase:
- Loan against investments: Instead of presenting an income history, you can offer to put savings you have as a guarantee to the bank - this known as "nantissement" and allows to continue to generate good returns on your investments, assuming they will be higher than the interest you will have to pay the bank. Banks in Monaco often provide this service.
- Interest only loans; This is normally only available for French residents, and allows you to fund up to 50% of your property purchase, at slightly higher interest of 5-6% and for up to 8 years. The capital then needs to be repaid at the end of the term, but you can choose to refinance the loan after via either a normal bank loan or another interest only loan.
- Peer to peer lending: This mode of lending is not normally available for large property loans and tend to be short term consumer loans. However Smartfinder Home is building a community of investors ready to provide longer term loans and for larger amounts, and that is guaranteed against the property.
So whether you are a buyer or investor, contact us regarding this program.
Depending on whether you are resident or non-resident, the amount you can borrow and the conditions vary.
For French residents, including foreigners who are tax resident in France, you will get the most advantageous conditions in terms of the maximum amount a bank will lend. Banks will lend 80% to 90% of the value of the property and if the monthly repayments do not exceed about one third of your net income. But this financing does not cover notaire fees, that are around 8% of the total cost, so best is always to assume you will need about 20% in cash to buy a property.
For foreign residents from the EU and the certain countries not in the EU like Norway, UK or Switzerland, the maximum you can get is 80% of the property value, so with notaire fees, best if is to assume you need 30% cash to buy a property.
For residents outside of Europe, from Asia, Australia or America, the maximum amount you can get via bank loans goes down to 50%, so if you need more finance, buyers from these countries should look at getting finance from their own country.
U.S. are an exception, as almost no banks cover tax residents from the US due to stringent tax obligations imposed by the IRS.
There are a small number of banks and brokers only that deal with non-residents, so contact Smartfinder Home and we will pleased to put you in touch with them.
Interest rates vary over time and loan periods, and recently they have gone from as low as 1-2% to around 4% in 2024, but they are slowly beginning to go down in line with the reduction in inflation. And loans periods vary from 8 to 25 years, with a cap for older borrowers that must finish repaying the loan at 75 years of age, although some banks can go above that limit.
Useful to know is that French banks will prefer buyers with stable incomes, rather than entrepreneurs, unless you have a track record of at least 3 years history of French tax declarations.
Other forms of financing to buy property
Here are 4 other ways you can finance your property purchase:
- Loan against investments: Instead of presenting an income history, you can offer to put savings you have as a guarantee to the bank - this known as "nantissement" and allows to continue to generate good returns on your investments, assuming they will be higher than the interest you will have to pay the bank. Banks in Monaco often provide this service.
- Interest only loans; This is normally only available for French residents, and allows you to fund up to 50% of your property purchase, at slightly higher interest of 5-6% and for up to 8 years. The capital then needs to be repaid at the end of the term, but you can choose to refinance the loan after via either a normal bank loan or another interest only loan.
- Peer to peer lending: This mode of lending is not normally available for large property loans and tend to be short term consumer loans. However Smartfinder Home is building a community of investors ready to provide longer term loans and for larger amounts, and that is guaranteed against the property.
So whether you are a buyer or investor, contact us regarding this program.
Useful links for more information:
https://www.frenchentree.com/french-property/french-mortgages/french-mortgage-eligibility/
https://www.frenchentree.com/french-property/french-mortgages/french-mortgage-eligibility/
