The single most important element in successfully getting a mortgage in France is INCOME…

There are no ‘self certification’ loans and there are no non-doc (“sub prime”) loans in France, and you will need to prove that you are receiving a regular income that it covers all of your debts three times over. This is because of strict Banque de France lending laws state that your total debt cannot exceed more than 1/3 of your total income, in some circumstances depending on the bank you may get a slightly larger margin but this is never more than a few percent. So if you earn €3,000 per month as a salary then your mortgages (including the new one), credit cards, loans and other debt repayments cannot come to more than €1,000 per month.

EXAMPLE
Purchase price                    €300 000
Deposit of 15%                    €45 000
Notary fees (approx 8% )      €24 000 (total cash needed €69 000)
Mortgage                             €255 000

The repayments for this mortgage over 25 years at 5% would cost €1490 per month, plus approximately €80pm life insurance. This would mean that you would need to prove an income, after all other debts, of €4500pm or approximately €54,000p.a. Depending upon which bank you approach will depend upon this figure being your Net or Gross figure.

The notary fees tend to work out as: 6.3% in government taxes (like stamp duty), plus 1% in notary administration fees and approximately 1% of the mortgage amount assignment fee if you are taking a mortgage to assign the bank’s legal interest in the property.

EU residents may be able to borrow up to 90% of the property purchase value, depending on their nationality. Non EU residents may only be able to borrow up to 75%. The loans can be for up to 30 years, depending on age and bank chosen. As the buyer you need to fund the deposit (minimum 15%) plus the notary costs (approximately 8%).

All mortgage interest rates in France are linked to the Euribor (Euro Interbank Offered Rate) which was introduced at the beginning of 1999 along with the European single currency (the Euro), because European banks considered that it was necessary to establish a new interbank reference rate within the Economic and Monetary Union. See this link for more information.

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