French mortgage rates drop below 3.0% for first time in 100 years

1st December 2014

French rates have now 'officially' dropped below 3.0% with a 20 year fixed rate mortgage now standing at 2.90% (on a 80% LTV) bringing even more long term value to the plate of French property buyers.

John Busby from French Private Finance www.frenchprivatefinance.com gives his view on the latest from the French mortgage market.


"Well we have now reached another milestone for these historic French mortgages. Buyers looking to secure a French loan in the near future can now enjoy these record low rates, which also include a 25-year fix from 3.15%."

"When I first started in this market the thinking was that if you would be able to fix your mortgage under 4% for 20 years you would be on to a winner. At current rates, buyers can save approximately 12k per 100k borrowed over a 20-year term versus a rate of 4% [Fig.2] and when inflation returns to 2% per year the real interest rate on this loan will be less than 1%."

"It is great to see that property yields in France are also fairly stable and have not fallen in popular areas. With a return of 3.8% net you can now more than cover off the interest charges on a 20-year repayment loan at 2.9% and the rental should also cover 25% of the capital payment [Fig.1]."

"Not many things are fixed or certain in this world but a French mortgage can be and I think you can be fairly certain about the value of 2.9% fixed over 20 years."

French Mortgage Comparison Graphic
French Mortgage Comparison Graphic

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