Hi there, and welcome to your South of France surveyor’s second article on the topic of how to go about acquiring a mortgage to purchase your new property in this wonderful region of the world.


In our last article, we took you through some of the pros and cons of arranging your mortgage with either a UK-based bank or by employing the services of a French mortgage broker in your destination country. In this piece, we’ll be assuming you’ve decided to go with the latter option of arranging the mortgage in France and discussing what sort of loan to value (LTV) you can expect to get.

French Loan to Value Ratios

Firstly, the bad news. Most French lenders will refuse to lend over 80% of the purchase price when it comes to lending on a second home, so you’re going to need to find at least 20% yourself.


However, if you are looking to purchase a main residence in France, or are seeking finance for home improvements or investment, the rules can be a bit more flexible. Also, if you are a young couple (and have more time in which to pay the loan off), you may find lenders are willing to consider your circumstances when calculating your LTV rate.


While you are unlikely to find a French lender willing to grant a 100% mortgage, there are some other options available to you.


When raising your deposit, certain other loans are permitted to be included. By increasing your deposit using a prêt à taux zéro loan and/or a l’épargne-logement plan, you can boost the overall LTV ratio of your mortgage.


Before steaming ahead, you should know that almost all these options will hinge on you having already acquired residency in France and your meeting of certain income criteria.


Income Criteria

France is unlike many other countries in that mortgages are not granted by working out a multiple of your earnings. French lenders are more interested in the level of your debt to total earnings, together with your income stability.


The bank will make a judgement call on your income stability and reduce or increase your debt ratio accordingly. Rates start at around 33% of total eligible ratios, and can be increased to 40%, or reduced to 20%, depending on these circumstances.


Therefore, if you are self-employed, or have recently started a new business, you may find French lenders a little wary. Similarly, if the majority of your income comes from a service such as property rental, the bank may only accept a portion of the income, due to the risks associated with non-payment of rent.


You should also be aware that you will likely have to fund the transaction costs of your mortgage which are normally around 10% of the purchase cost. Some lenders are willing to include the fees in the loan, but you will get less competitive rates as a result.


Final Thoughts

Getting a mortgage in another country can be a complicated affair. However, if you have a knowledgeable and experienced South of France surveyor backing you up, you will stand the best chance possible of getting a great deal.


Please get in touch today with Charles Mackintosh for more information.