How much can I borrow and deposit

How much can I borrow?

This will depend on your income. While French banks do not carry out credit checks, they ask for substantial documentation to prove your financial situation. 

French banks work on a debt-to-income ratio. This means they will not allow financial liabilities, which include your mortgage but also things such as any other outstanding loans, to exceed 35% of your gross monthly household income. This is important for buyers to keep in mind when house hunting and it will determine how much they will be able to borrow. 

Banks will analyze at least three months of your accounts, so “if you know you’re going to come over, make sure your bank accounts are looking nice and tidy,” says Martin Heathcote, head of France Home Finance, a broker that has been helping mainly non-residents buy in France for over 20 years. 

Be aware of other fees

Property transaction fees can total 10-15% of the total property price. Fees include: 

Frais de notaire (notary fees) - these include registration fees or transfer taxes paid to the state via a notaire - they are roughly 7.5% of the property price 

Bank arrangement fee - around 0.5-1% of loan amount 

Life insurance - many banks will require lenders to take out a life insurance policy of at least 100% of the loan amount. “That’s something you really need to consider – it can be a fairly significant part of the cost of the overall loan,” says Mr Heathcote.

Any surveys that may be needed

Broker - if used. They can be especially useful if you are in a “not normal” situation, e.g. if you are self-employed or a non-resident 

How much of a deposit will I pay?

The average US buyer “should budget around 20-30%” for a deposit, according to broker Martin Healthcote.

Residents in France will be able to borrow more than non-resident buyers, sometimes up to 90-100% of the property price.

What if I’m self-employed? 

There are fewer options for borrowers who are self-employed, but it is still possible to get a mortgage. 

“It’s more difficult but not impossible,” says broker de Monclin. “What is important is being able to evidence some recurring income.”

Prospective buyers will need to show at least three years of accounts, ideally more, and strong financials.