Cheaper mortgages make buying in France easier

Historically low interest rates and a buoyant housing market mean that there may genuinely never have been a better time to buy a property in France.

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Lending rates in May fell below the historic lows of late 2016 – and experts say they do not expect any rises now before spring or summer 2020.

All terms combined, borrowers benefited in April from an average rate of 1.35% (compared to 1.39% in March), according to figures from the Observatoire Crédit Logement CSA, the leading body in this field. In detail, 15-year fixed loans average around 1.09%, 1.27% over 20 years, and 1.47% over 25 years.

Since the beginning of the year, banks have reduced their lending rates by an average of 0.15% – making new mortgages, or renegotiating existing loans, an attractive proposition.

Some institutions have reduced their rates for the second or third time since January, by as much as 0.3%. In most cases, banks in France can lend up to 80% of the purchase price of a property.

However, you must fulfil strict affordability criteria that take into account your debt as a percentage of your annual income – and how reliable that income is. Generally, the annual costs of servicing your total debt cannot exceed a third of your eligible earnings.

If your income is not stable, perhaps if self-employed, this requirement can be more strictly applied, although it might be relaxed if you are in a high-earning job that is relatively secure.