How to compare mortgage offers in France

How to compare mortgage offers in France

Comparing French mortgages means analysing more than just the nominal interest rate. You need to consider the TAEG (annual percentage rate of charge), mandatory insurance, early repayment penalties, and total cost over time. These factors can significantly impact the affordability of your loan.

Key comparison factors

• TAEG (Taux Annuel Effectif Global): This is the true cost of the mortgage including all fees, interest, and insurance—compare this across banks.

• Loan duration: French mortgages typically range from 15 to 25 years. Longer loans = lower monthly payments, but more interest overall.

• Loan insurance (assurance emprunteur): Often obligatory, especially for death and disability. Costs and coverage vary widely.

• Upfront and hidden fees: Include arrangement fees, notary fees (~7–8%), appraisal costs, and government taxes.

• Early repayment penalties: Most fixed-rate loans include fees if you repay early—typically 3–6 months of interest.

Use tools like Meilleurtaux, Pretto, or CAFPI to compare offers. Brokers can help you find competitive terms, especially if you’re a non-resident. Always read the full loan estimate (FISE) before committing, and ask if any optional insurances are included by default.

Negotiating better terms

Having stable income, a larger deposit, and clean credit improves your bargaining power. Some lenders offer reduced rates if you open a current account or transfer salary to their bank. Others may waive fees for certain professionals or young buyers.

If you're self-employed or retired, be ready to provide additional documentation—like tax returns, pension letters, or business accounts. And don’t be afraid to play banks off one another.

Understanding mortgage types in France

Understanding mortgage types in France

France offers a structured mortgage landscape with several options tailored to income, residency status, and property type. Mortgages are available to French residents and many foreign buyers, with specific conditions. French loans are typically long-term (15–25 years) and repaid monthly, with life insurance often bundled into the offer.

Main types of French mortgages

• Fixed-rate mortgage (prêt à taux fixe): Interest rate and monthly payment remain the same throughout the term—ideal for stability.

• Variable-rate mortgage (prêt à taux variable): The rate changes periodically, often capped. May start lower than fixed, but can increase.

• Mixed-rate mortgage (prêt à taux mixte): Combines fixed and variable elements—fixed for early years, then variable.

• PTZ (Prêt à Taux Zéro): Government-backed zero-interest loan available to first-time buyers under income limits, usually as a top-up.

• Interest-only mortgage: Repay only the interest for a period (often 5–10 years), with the capital due later—used for rental investments or wealth planning.

Fixed-rate loans dominate in France due to low interest volatility and borrower preference for predictability. PTZ and social schemes offer added support for eligible buyers. Foreigners may face stricter LTV ratios or income requirements, but many international lenders specialise in French property finance.

Basic eligibility and lender conditions

Most lenders require proof of income, low debt-to-income ratio (below 35%), clean credit history, and a deposit of at least 10%–20%. Mortgages are generally denominated in euros, and life insurance is often mandatory and tied to the loan. Non-residents may face longer approval timelines and slightly higher rates.