June French Mortgage Update

Interest rates are lower compared to January 2010 with the Euribor 3 months rate at 0.634% so it is the best time to take on a fixed rate, at their lowest value ever

French interest rates and how they work

Most of the French lenders index their rates to the Euro Interbank Offered Rate, or Euribor, the average interest rate at which term deposits are offered between prime banks in the EU wholesale money market or interbank market. Just like the LIBOR serves as a short-term reference rate for British Pound and U.S. Dollar, the Euribor is widely used as a reference rate for Euro .

The French banks usually index their rates to Euribor 3 months currently at 0.634%, 0.046% lower than in January 2010. Each bank applies a margin of between 1.30% to 2.50% depending on the lender and the product’s features.

Variable products are usually redemption penalty free, although some banks may charge penalties in case of a re-mortgage. Fixed products are currently very low and very popular, but capped products starting at 3.50% and capped at 4.50% are also recommended in the current climate.

Best French Mortgage products currently on the market

1. 100% LTV French mortgages with capped rates starting from 3.50%*
2. Rates fixed for the entire term starting from 3.15%**
3. Some French products are capped at 1% above the initial rate, to give you more security
4. Interest only mortgages with variable rates starting from 3.00%
5. Rates starting from 2.40% for equity release and re-mortgage

Rate type Interest rate*** Maximum LTV Monthly repayment for €100,000 over 15 years
Variable Interest Only 3.00% 80% €250
Variable Repayment 2.20% 80% €658
Fixed Interest Only 3.95% 70% €329
Fixed Repayment 3.85% 80% €732
Capped Repayment 3.50% capped at 4.50% 100% €723

* You would only be expected to pay the Notaire fees and the estate agent’s fees. Available only for properties of over €300,000
** Over a short term of 6 years on a repayment basis, for a loan of or above €230,000
***Higher rates may be applicable for longer terms and different loan amounts

For more details regarding French mortgages, you can have a look at our website dedicated to French mortgages: http://www.sextantmortgages.com

If you would like to receive a free quote with no obligation, contact our in-house mortgage consultants by telephone: 0207 428 4918 or by email: mortgages@sextantproperties.com

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This entry was posted on Tuesday, June 8th, 2010 at 4:13 pm and is filed under Finance, French mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.


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