Low Mortgage Rates In France To Continue Into 2013
News Posted On: 28 December 2012
The mortgage rates in France have been extremely low in recent times and this has attracted several suitors to make a move on French property. Applications are approved regularly as the mortgage market continues to pick up.
French Private Finance, a mortgage specialist in the country says that interest has increased as investors realise that there hasn’t been a better time to invest in France. The agency reports that quotes of around fifteen million euros worth of properties in the Alps were sold in a single week in early December 2012. The mortgage rates have been at their historic low, encouraging investors to acquire properties quickly. French lenders now sanction loans of around 80 per cent of the property’s value at interest rates of around 2.5 per cent over twenty five years, according to John Busby, the director of the firm.
2013 is likely to see an influx of investment as the low rates of interest will remain. Mr Busby added that banks in the country continue to express their interest in offering their services to non-residents as well. He also revealed that Europe has been improving in recent times and that consumer confidence has also picked up, so it cannot be assured whether these ultra-low rates will stick around for a very long time.
Low rates attracting high levels of interest
Busby explained that the year didn’t get off to a bright start. In fact, there was a sharp decline in demand for French properties. However, signs of improvement were recorded in early September as mortgage rates dropped and an increased number of potential investors began expressing their interest in acquiring a home in France. In December 2012, 49 per cent of French banks reduced their mortgage rates while 51 per cent have not made any changes. No bank recorded any increases. There was a slight decrease in the average rates as well, from 3.58 per cent to 3.55 per cent over twenty years. The average decrease in rates during 2012 is 0.50 per cent. This was something that nobody anticipated at the beginning of the year.
Busby said that one of the major factors that are helping demand rise included the banks. He explained that borrowing a sum of around 200,000 euros over twenty years will cost eighty euros less on a monthly basis, thereby increasing the overall savings to around 20,000 euros over the course of the mortgage period. He also discussed the trend wherein people seek short-term mortgages with small capital and short durations. According to the director of French Private Finance, the conditions favour buyers who want apartments for lower prices.
Busby said that a large number of banks in France have lowered their requirements when seeking borrowers. Unlike before, younger individuals who are interested in acquiring French property have a good chance of realising their dream. Even individuals who do not earn high levels of income can afford mortgage payments due to the low rates. Overseas buyers are also showing plenty of interest in French real estate as purchasing a second home couldn’t be done at a better time.
Written by Les Calvert
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