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Why put your French property purchase on hold because of Brexit

Friday, 25 January, 2019
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Why put your French property purchase on hold because of BREXIT, read below to see how a French mortgage can help with a purchase today rather than having to continue to put back your plans to own a French property.

 
A French mortgage can make the exchange rate work in your favour. Purchasing the property with the help of a  French mortgage could bring that decision forward to purchase.     A Euro mortgage can reduce the exchange rate volatility.
 
Exchange rates do fluctuate , especially in times of uncertainty , as we are experiencing now . There are potential gains to be made with the use of a French mortgage .  Take the example  shown in  the attached link  below (how a French Euro mortgage can save you money) , which was based on a purchase price of E850 000, and took place in 1995 , with the use of a French mortgage of  E500.650 at the  exchange rate of the day (1.147E/£),    In this example had the purchaser paid in cash or taken out a UK mortgage, it would  have cost him £741,064 . Instead he chose to purchase with the help of a French mortgage, based on a fixed rate, over a 20 year term . The result at the end of mortgage term was a total cost in sterling of  £677,161, representing  an exchange rate benefit of  just under £74,000  (£63 903) compared to a cash purchase/ sterling mortgage purchase which was tied into the exchange rate of the day.
 
The above example serves to demonstrate how a French purchase investment can work in your favour by using a  French mortgage as the debt is in the same currency as the asset.  
 
In addition , a French mortgage can reduce your cash contribution and the sum that you have to convert from sterling at the time of purchase where you are committed to the Euro exchange rate of the day . The maximum loan to value considered by French banks tends to be 85% ( without the need for a side investment ). The French mortgage route if agreed ,has the effect of limiting  the sum to be converted into Euros to 15% of the purchase price plus fees.
 
French mortgage options - you do have the flexibility by choosing a French mortgage scheme that has no early redemption penalties  to repay the mortgage capital when it suits you ,at a point  in the future  when the exchange rate has changed in your favour .
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