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Independent Financial Adviser est. 1988
French and Spanish Mortgage Brokers
French Tax Planning Specialists

French Mortgage Deal of the Week

Friday, 27 September, 2019



Repayment Mortgage                      1 600 000
Fixed interest rate                                  1.30%     
Mortgage payment pm                          7 575
Estimated French life assurance pm      527
APRC                                                         2.0%



Our client found a French Chalet for 2950 000 net of VAT and his offer to purchase was accepted.  The property was an investment being in a popular French sk-ing resort generating an estimated French rental income of E150 000 pa (E 12 500 pm). This size of the French mortgage results in him being able to offset the interest paid on the French mortgage against future  French Wealth Tax and the low fixed interest rate of 1.30 % means that  the mortage payment of E7575 pm plus  life assurance is more than covered by the future French rental income.
In addition whilst all long term fixed French interest rates carry early redemption penalties equal to 6 months interest , capped at 3% of the outstanding mortgage capital , the bank agreed to waive all early redemption penalties, enabling our client to repay capital from excess rental income and future dividends when it suits him without any cost.
At outset due to the size of the mortgage , the bank requested a sum in excess of E500 000 to be placed in a mix of savings and shares .  We were successful in obtaining the bank's agreement to reduce this to E350 000.   

The APRC (annual percentage rate of charge) serves to illustrate the anticipated cost over the full term of the mortgage taking into account  the following estimated costs:


The bank arrangement fee          8000 

Charles hamer arrangement fee         12300  

The mortgage regisration fee                6560 

The interest paid over the mortgage term and the cost of the French life assurance policy