June 16, 2020: For a while, it seemed that the development of French mortgage rates had found a definitive way upwards. The interest rates have risen in both April and May, to the dissatisfaction of many market parties, banks and the government, alleging that in these times the market should be stimulated instead of slowed down.
Mortgage interest was 1.4% for 20 years
In June, the ship turned ashore; The increment seemed to have ended for the time being. On balance, the interest remained almost the same, to slightly increased. The absolute height of it is still highly acceptable. The French were able to borrow for the rate of 1.35% for over 20 years. The rates are always higher for purchases which came from abroad. These loans are seemed to be riskier and therefore applying a kind of surcharge was required. Interest for a French mortgage, obtained via Fynis International Mortgages, costs approximately a fixed 1.4%, for 20 years, with the financing of 70% of the purchase price.
Banks are tightening their acceptance policies across the entire French breadth. This is also relevant for the purchases from the Netherlands, financed in France: variable rates are temporarily not offered and incomes from certain sectors are not included in the calculation of the debt burden. The maximum debt burden ratio (percentage of financial charges with relative to the income) is 33% in France. Market parties have asked not to limit this any more; it would directly affect the number of transactions which are being made on the housing market.
French real estate market
The first months of 2020 showed an average price increment of 5% compared to the previous year. The question is how the prices will develop in the coming months. Not only that, there is still a need for housing, especially in the big cities, but also the income is under pressure for many. And the space for investment has been decreased. In addition to this, the attracted acceptance policy of the French banks on [La Tribune 30 May 2020] has become a severe issue.
By getting a private house in France, you could be a proud owner of carefree safe stay. If you have an idea to buy a property in France, do not hesitate to contact us. We, at Fynis International Mortgages can investigate what your options could be. Request us here for mortgage calculation, or an offer when you have already a house on the eye. There are no costs involved. We assure that you will receive our statement within two working days.