Financing your purchase

Mortgage options when purchasing off plan

Consider how you will be financing your French property purchase before visiting the areas and the residential developments which are of interest to you.

If you are raising a mortgage, investigate the options as early as possible. Most French mortgage lenders will give a decision in principle before you decide on a particular property. This will also give you an idea of the price range you should be looking at.

a. French Mortgages: French banks will lend up to 85% of the property purchase price on a second home. Rates offered are variable or fixed, the term is usually between 7 years and 25 years and it will generally be on a repayment basis. Mortgage offers for an off plan property should be in place within one month of signing the reservation contract, as stated in the reservation contract terms and conditions. Once you have paid your contribution from your own funds the French bank will take over the stage payments, having received authorisation from yourself to do so.

b. UK Mortgages: When purchasing off plan property in France with a UK mortgage the mortgage is not registered in the reservation contract and the purchase is classed as a cash purchase. We do, however, strongly recommend that the UK mortgage is in place or agreed before the reservation contract is signed.

Off plan reservation contracts cannot be signed subject to the sale of another property.

Mortgage registration fees

If you raise a French mortgage to finance your new build purchase, fees will apply (Frais d’Hypotheque) which are calculated on a percentage of the purchased price. The French Notaire confirms these at the time of signing the Deed of sale. They are due at the same time as the French conveyancing costs. The bank will also charge a one off administration fee of approximately 1% of the borrowed amount.

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