French Mortgages for Non-Residents: A Comprehensive Guide for HNWIs

Your definitive guide to obtaining a mortgage in France as a non-resident. Explore the French property market, mortgage options, lender criteria, and step-by-step processes to secure the best financing for your luxury property purchase in France.

• Why Invest in French Property

• Mortgage Market Overview in France

• Lender Criteria and Requirements for Non-Residents

• The French Mortgage Process: Step-by-Step for Non-Residents

• Costs, Taxes, and Legal Considerations for Non-Resident Buyers

• Example Scenarios: French Mortgage Cases for HNW Buyers

• Conclusion: Next Steps to Secure Your French Mortgage

Introduction

Purchasing prime real estate in France is a dream for many international buyers, from elegant Parisian apartments to idyllic Riviera villas. As a high-net-worth individual (HNWI) living abroad, you have access to unique mortgage options in France that can make this dream a reality. However, navigating the French mortgage landscape as a non-resident requires understanding specific lending criteria, legal processes, and financial considerations. This comprehensive guide will walk you through everything you need to know about French mortgages for non-residents, ensuring clarity and confidence as you plan your investment.

In this guide, we’ll cover:

• Why Invest in French Property? – The allure of France’s property market and what makes it attractive.

• Mortgage Market Overview – How French lenders approach non-resident borrowers and current lending conditions.

• Lender Criteria & Requirements – Income, deposit, documentation, and eligibility factors for foreign investors.

• Mortgage Options in France – Loan types available (repayment vs interest-only, fixed vs variable), and special HNWI programs.

• The French Mortgage Process – Step-by-step timeline from application to property completion for non-resident buyers.

• Costs, Taxes & Legal Considerations – Additional fees (notary, taxes) and regulations like wealth tax (IFI) that could impact your purchase.

• Example Scenarios – Realistic financing examples illustrating how a non-resident mortgage might be structured.

• FAQs – Quick answers to common questions from international buyers about French mortgages.

• Next Steps & Contacts – How to move forward and who to reach out to for personalized advice.

This guide is part of our series on international mortgages for HNWIs. If you’re considering property investments in other prime European locations, be sure to also check out our guides on Switzerland, Spain, Italy, Portugal, and Monaco for comparison.

Why Invest in French Property?

France has long been a favourite destination for global investors and luxury property buyers. Understanding the appeal of the French real estate market will provide context for why securing a mortgage in France can be a worthwhile endeavour:

• Stable and Resilient Market: The French property market – especially in major cities like Paris – has a history of stability and resilience. Prime areas in Paris are perennially in demand, supported by both domestic and international buyers​
  Even during broader economic fluctuations, high-end Parisian real estate tends to hold value, offering a relatively safe haven for investment. This resilience gives lenders confidence, making mortgages more readily available for quality properties in France’s top locations​
  .

• Global Demand and Liquidity: Iconic regions such as Paris, the Côte d’Azur (French Riviera), and Provence attract a worldwide clientele. International interest – from British and European buyers to Americans, Middle Eastern and Asian investors – creates a liquid market for luxury properties. For example, since Brexit there’s been substantial British interest in Paris as buyers seek euro-denominated assets post-Brexit​
  . In the Côte d’Azur, long a magnet for second-home seekers, demand continues to grow and drive up prices​
  . This global demand means that, should you ever wish to rent out or resell, you can expect strong interest and the ability to generate rental income year-round on desirable properties​
  .

• High-End Properties & Lifestyle: France offers an unparalleled lifestyle that draws international buyers – whether it’s the culture and business environment of Paris, the glamour and climate of the Riviera, the vineyards of Bordeaux, or the ski chalets of the French Alps. Investing in French property isn’t just a financial decision but also a lifestyle choice. Ownership can provide personal enjoyment (as a second home or vacation retreat) while also being a part of a diversified investment portfolio.

• Favourable Interest Rates (Historically): French mortgages have traditionally featured low interest rates compared to many other countries. This is partly because French lenders often offer long-term fixed rates and the Eurozone’s interest benchmarks (like the Euribor) have been low in recent years​
  Although rates have begun to rise globally as of 2024, France still offers competitive mortgage rates by historical standards, with the ability to lock in fixed rates for up to 20 years or even the life of the loan​. Such fixed-rate security is a big advantage for financial planning, providing predictability in mortgage costs.

• Solid Legal Protections: France’s legal system provides robust protections for property buyers. Transactions are overseen by licensed notaries (notaires) who ensure clear title and adherence to property laws. Financing agreements are well-regulated; for instance, there are strict laws around mortgage offers (including a mandatory cooling-off period for borrowers) which add a layer of protection for buyers (more on this later). This transparency and legal rigor give confidence to foreign investors entering the market.

In summary, France’s combination of a strong real estate market, international demand, lifestyle benefits, and traditionally low financing costs makes it a compelling place for HNW individuals to invest in property. With that backdrop, let's look at how you can leverage mortgages to capitalize on these opportunities as a non-resident buyer.

Mortgage Market Overview in France

France has a well-developed mortgage market that does accommodate non-resident buyers, including foreign nationals and expats. However, the landscape has its nuances. Here’s an overview of what to expect as an international borrower in France:

• Willing but Cautious Lenders: Generally, French banks are open to lending to foreign buyers and non-residents. There is no blanket restriction on non-residents obtaining mortgages in France – many lenders actively service this segment. That said, banks will scrutinize a foreign borrower’s financial profile more rigorously than they might for a local resident​. As a non-resident HNWI, you should be prepared for a thorough review of your income, assets, and creditworthiness. Lenders want to ensure that extending credit to an overseas client carries no additional risk.

• Loan-to-Value Ratios: The Loan-to-Value (LTV) ratio available to non-residents typically ranges from about 70% up to 85%, depending on your profile and the lender. French high-street (domestic) banks are often generous with LTV for solid borrowers – 70% to 80% financing is achievable for many non-resident buyers​. In some cases, certain banks even offer up to 85% LTV for non-French residents with strong profiles​. However, HNW buyers often choose to put down larger deposits (e.g. 30% or more) both to improve loan terms and because property values are high. Note that LTV offerings can vary by nationality/residency: for example, one lender might offer up to 80% LTV to EU residents, but cap at 70% LTV for U.S. or other overseas borrowers​. French expatriates (French citizens living abroad) can sometimes access even higher LTVs (up to 90%) as a special category​. We’ll discuss down payment expectations in the next section.

• Interest Rates and Terms: French mortgage products come with a variety of interest rate structures:

• Fixed-Rate Mortgages: Very popular in France. You can often fix the interest rate for 10, 15, 20, or even 25 years. Some loans allow fixing the rate for the entire life of the loan​. Traditionally, French fixed rates have been low (thanks to low Euribor rates​), though current rates reflect global increases. Still, locking in a rate provides stability. HNW borrowers often like long-term fixed deals to know their cost of borrowing upfront.

• Variable-Rate Mortgages: These track an index (often Euribor) plus margin. Initial rates might be lower than fixed, but can rise (or fall) with the market. French variable loans sometimes have rate caps to limit extreme fluctuations. In a rising rate environment, many opt for fixed; in expectations of falling rates, a variable could be advantageous​. It’s possible to start variable and later refinance or renegotiate to fixed if conditions change (French lenders do allow some renegotiation over time, though this is not a given and important to check loan offers carefully).

• Interest-Only vs Repayment: The majority of standard French mortgages for non-residents are repayment (capital + interest) loans​, meaning each payment gradually pays down the principal. Interest-only mortgages (known as prêt in fine in France) are available but are less common from mainstream banks and typically come with conditions (often requiring assets under management or higher net worth). We will delve deeper into interest-only options in the Mortgage Options section. In short, interest-only is primarily offered by private banks or via special arrangements, whereas retail banks usually insist on repayment structure​.

• Typical Loan Sizes and Durations: French retail banks commonly offer mortgage terms up to around 20 years for non-residents, sometimes 25 years maximum​. Shorter terms (10-15 years) are available and sometimes used by HNWIs who plan to pay off sooner or refinance. The loan size can range widely; many domestic banks have upper limits (often around €5 million for a single mortgage​). For ultra-high-value purchases, private banking institutions step in (they might have no hard upper limit, but require substantial collateral or assets). We’ll cover private bank mortgages separately. Also, most lenders have a minimum loan amount (commonly around €250,000 or more) – which isn’t an issue for luxury properties but worth noting if you ever needed a smaller loan (for example, buying a modest apartment).

• Foreign Currency Considerations: If your income or wealth is primarily in a currency other than Euro, lenders will factor in currency risk. French banks prefer that the mortgage payments be comfortably affordable even if exchange rates fluctuate. In practice, this means they might discount the value of your foreign income in their affordability calculations to account for possible currency depreciation​. For example, if you earn in US dollars or British pounds, the bank might only credit, say, 80% of that income for their debt-to-income assessment to build in a safety buffer. Additionally, mortgages in France for non-residents are almost always denominated in Euros (EUR). Unlike some international markets, it’s uncommon to find a French property loan in a different currency – French banks will lend in EUR against French property. Thus, borrowers often use foreign exchange services to convert funds for down payments, fees, and ongoing payment; planning for exchange rate costs is important.

• Competitive Landscape: You won’t be limited to a single option – multiple types of lenders are active in offering mortgages to non-residents:

• Domestic French Banks (High-Street Banks): These include major French banking groups and local banks. They offer standard mortgage products and generally have the best rates. Some cater to non-residents with strong financials, though they are somewhat strict on documentation and profile.

• Private Banks (International or French Private Banking arms): These are geared towards HNWIs and offer bespoke solutions, often including interest-only loans or higher LTV with asset-linked arrangements. Private banks can finance large purchases that exceed normal bank limits, but typically require an Assets Under Management (AUM) relationship (e.g. you place liquid assets/investments with the bank) as part of the deal.

• International/Challenger Lenders: A few niche lenders or international banks provide financing in France for special situations (such as shorter-term bridge loans, or loans to purchase through corporate structures). These lenders might have higher interest rates or fees, but add flexibility if traditional banks can’t accommodate the deal.

Bottom line: The French mortgage market offers solid possibilities for non-resident borrowers, but it is characterized by thorough credit analysis and some built-in constraints (like moderate LTVs and standard affordability rules). Knowing these in advance will help you set realistic expectations. In the next section, we’ll look closely at those eligibility criteria and requirements that French lenders apply to HNW foreign investors.

Lender Criteria and Requirements for Non-Residents

As a non-resident mortgage applicant in France, you will need to meet certain criteria and prepare a robust documentation package. French lenders apply fairly standardized requirements to ensure you can service the loan comfortably. Below we break down the key criteria and what you’ll need to qualify:

Income and Affordability

French banks evaluate your ability to repay the mortgage by looking at your income relative to debts – essentially your debt-to-income ratio (DTI). The commonly used rule in France is the 33% rule:

• Your total monthly debt obligations, including the new French mortgage, should not exceed roughly one-third (33%) of your gross monthly income​. This is a guideline, not a strict legal limit, but most banks adhere closely to it. For HNWIs with very large incomes, occasionally a lender might stretch this to 35-40% if significant disposable income remains, but it’s safer to plan for 33%.

• Income Stability: Lenders prefer borrowers with consistent, verifiable income. Salaried employees with steady pay will fit easily into the framework. If you have a variable income (bonuses, commissions) or self-employment income, the bank may take an average of the last 2-3 years of income to smooth out fluctuations​. Be prepared to show tax returns and financial statements for the past 2-3 years to document your earnings.

• High-Net-Worth Considerations: As an HNWI, you might have a substantial net worth but relatively low formal income (common for entrepreneurs, investors, or retirees living off assets). Traditional banks could view this as a challenge because of the full status underwriting – they want to see sufficient income stream. Some retail banks explicitly mention their mortgages are not suitable for individuals with complex income structures​. In such cases, a private bank lender might be more appropriate since they can consider your broader wealth and assets in lieu of just salary. Private banks often have greater flexibility in evaluating loan servicing capacity for those with complex or varied income sources​.

• Foreign Income: As noted, if your income is in a foreign currency, it will be assessed conservatively. For example, an American earning USD 300k/year might be treated as if it’s somewhat less in EUR for safety. Ensure you have official proof of income (payslips, employment letters, tax returns) translated if necessary. Banks will also want to see that income is stable and ongoing (e.g., not a short-term contract that could end).

Creditworthiness and Liabilities

French lenders will review your overall financial profile:

• They will look at your credit report or credit history. If you’re from a country with credit scoring (like the US or UK), it’s wise to have a good credit score and no major negative marks. While French banks might not pull a U.S. credit report, they often ask for a credit statement or evidence of debt conduct. At a minimum, disclose all existing loans.

• Existing Debts: They will ask for details of all significant ongoing debts – mortgages on other properties, personal loans, car loans, etc. These payments count toward the 33% debt to income (DTI) calculation. If you have large existing mortgages, high credit card balances, etc., it could limit the new loan amount you qualify for.

• Assets: Even though the loan is secured on the property, banks take comfort if you have substantial liquid assets or net worth. It’s a plus point to show investment portfolios, savings, or other properties you own. In some cases, showing assets (like a healthy stock portfolio or cash reserves) can compensate for slightly higher DTI or lower income, because it indicates you have fallback resources. Some lenders (especially private banks) may even require moving a portion of your assets to their bank as part of the deal (more on this under Mortgage Options).

Down Payment (Deposit) and Loan-to-Value

As a non-resident, you should be prepared to invest a significant down payment:

• Typical Down Payment: 30% of the purchase price is a common range for foreign buyers​, though this can go higher for larger loan amounts. Many banks require at least 30% for non-residents, especially if you are outside the EU. For example, if you are buying a €2 million property, you might need to have €600k (30%) in cash for the down payment, plus enough to cover taxes and fees. Some banks might accept 20-25% down if your profile is exceptionally strong or if you’re an EU resident buying in France.

• Higher LTV Possibilities: While not the norm, there are scenarios where you could finance more than 70-80%. Certain lenders or programs might allow 85% LTV financing​ for properties valued below €1M. Additionally, as an HNWI, if you work with a private bank and pledge other assets as collateral or open an investment account with the lender, it’s possible to achieve even 90-100% financing (essentially borrowing the full purchase price)​. This usually means you invest a sum (e.g., 20% of the property value) in stocks/bonds managed by the bank, and in return they’ll lend up to 100% of the property price. We discuss these structures later, but note that without such special arrangements, pure cash down payment will be needed for at least 20%+ with the norm being 30% for higher value loans.

• Collateral to Reduce Cash Required: Some banks allow using additional collateral to offset a smaller down payment. Offering other assets (like a portfolio of securities) can reduce the upfront cash required​. Practically, this might mean the bank takes a pledge on your investment account or a lien on another property. This is more common with private banking deals. The advantage is you don’t have to liquidate assets for a down payment; instead, the assets secure the loan and you get a higher LTV on the property purchase.

• Proof of Funds: Whatever the source of your down payment, you’ll need to show proof. Banks will want to see recent bank statements or investment account statements verifying that you have the required funds available for the deposit and associated costs. If the money is coming from the sale of another asset or a gift, you’ll provide documentation for that. Additionally, funds for the down payment should ideally be in an account under your name. Be ready to also explain the source of large funds (standard anti-money-laundering procedures).

Age and Loan Term Considerations

Unlike some countries, France does not have a strict maximum age for borrowers encoded in law – both active and retired people are eligible for mortgages​. However, banks do impose practical limits:

• Most French lenders require that the mortgage term end by a certain age, often around age 75 or 80​. For example, if you are 60 years old, a lender might cap you at a 15-year term so that the loan is repaid by age 75. If you are 40, you could likely still get a 20-25 year loan.

• Some retail banks might be hesitant to lend to retirees or those over ~65​, especially if income is solely from pensions. It’s not an outright no, but it means the credit committee will scrutinise how the loan will be paid in later years. Adequate pension income or other wealth would need to be demonstrated.

• For HNW retirees, a private bank mortgage might be easier to secure than a retail bank loan, since private banks can structure repayment or interest-only options that align with wealth management.

• If you’re younger, minimum age is typically 18, but since we’re focusing on HNWIs, that’s rarely an issue. More relevant is if you’re in your late 20s or 30s and already HNW, you likely have complex income (entrepreneurial or investment income) – again, private banks could be more flexible with such profiles.

Documentation and Process Requirements

Be ready to assemble a comprehensive set of documents for your mortgage application. Under French law, lenders must gather a full file of documents proving the borrower’s ability to afford the loan​

. Typically, you will need to provide:

• Proof of Identity and Residence: Copy of your passport (for all borrowers) and proof of your current address (utility bill, etc.)​. If you have a spouse who is co-borrower, include their ID docs as well. Non-residents will also include details of residency status in their home country.

• Proof of Income: This includes recent payslips (if employed), or financial statements and tax returns for the past 2-3 years (if self-employed or for business owners)​The bank may require an employer reference letter confirming your position and salary. If you earn bonuses, commission, or dividends, document those as well. Essentially any income you want considered, you must evidence with official documents.

• Proof of Outgoings/Debts: Details of existing mortgages or loans, typically by providing recent loan statements, mortgage statements, or credit card statements. If you pay rent or alimony, that should be documented too. The bank will use these to calculate your existing monthly obligations​.

• Bank Statements: Recent bank statements (last 3 to 6 months) for your main accounts​. They use these to verify your salary credits, see savings, and check for any undisclosed debt payments. Ensure your statements look clean (no anomalies or overdrafts) for the period.

• Property Details: If you have a specific property identified, you will need to provide the sales agreement (Compromis de Vente) or at least details of the property (location, price, type). The lender may request a copy of the signed purchase agreement once available, as it confirms the price and any conditions. If you haven’t yet signed a contract, a term sheet or broker’s note with property details might suffice initially.

• Other Documents: Depending on circumstances, additional documents can include: a credit report from your country, proof of insurance (if you already have a building insurance quote or life insurance, see below), documentation for the source of deposit (especially if funds were recently transferred to your account, they may ask for an audit trail), and a completed mortgage application form supplied by the bank or broker (a formal questionnaire about your info). If you are buying in a company name you will have to provide the KBIS for the company be it an SCI or SARL/SNC. More on this below.

All documents not originally in French may likely need to be translated into French (or at least English, depending on the bank) by a certified translator. Many banks accept English documents, but legal ones like the purchase contract will be in French by default.

Additional Requirements and Conditions

• Life Insurance (Mortgage Protection Insurance): French lenders customarily require a life insurance policy to cover the loan amount​
  This is to ensure the mortgage will be repaid if the borrower passes away. The insurance can be arranged through the bank’s affiliate (often the easiest route) or you can sometimes use a third-party policy (but the bank must accept it). The cost will depend on your age and health. As an HNWI, if you already have substantial life insurance or prefer not to encumber the loan with this, discuss with your lender or broker – occasionally exceptions or lower coverage amounts are possible, especially with private banks​. But in general, expect to get a life insurance policy for the loan. You’ll need to complete health questionnaires and possibly medical exams for this process. If you have any health issues, note that it could affect insurability or premium cost.

• French Bank Account: You will be required to open a French bank account by the time of the property purchase completion​. Mortgage payments must be debited from a domestic (French) account in most cases. This is a formality easily handled – many lenders will help non-residents open an account with them or a partner bank. It’s typically a straightforward step once your mortgage is approved. The account will be used to receive the loan funds (which then go to the notary for the purchase) and to set up automatic monthly debits for your repayments.

• Property Insurance: As with any mortgage, the property itself must be insured. Home building insurance needs to be in place by the completion date​. You can arrange this with a French insurance provider or sometimes through the bank’s insurance arm. Proof of insurance will have to be shown before or at completion (the notary will often check this). This protects both you and the lender against hazards (fire, damage, etc.).

• Legal Structure of Purchase: If you plan to buy the property through a company rather than in your personal name, be aware of the implications:

• French banks generally do not lend to foreign corporate entities (for instance, a UK Ltd or an offshore company)​. However, one workaround is using a French property-holding company called an SCI (Société Civile Immobilière). An SCI is a common vehicle for families or groups to own French property, and it can also be used by an individual for estate planning. Some banks will lend to an SCI (since it’s a French entity), but the requirements will include personal guarantees from the shareholders. If you are considering an SCI for inheritance or tax reasons, consult a French legal advisor and ensure your chosen lender is comfortable lending to an SCI. The process and rates are mostly the same, though setup of the SCI adds some upfront cost and complexity.

• If buying via an SCI, the documentation needed includes the company statutes, proof of registration, and financial statements (if any). Often SCIs are newly created just for the purchase, so the bank focuses on the personal financials of the owners instead.

• Buying in personal name is simpler for financing, so unless you have a clear reason for an SCI, you might opt to buy personally and address inheritance via other means (like the appropriate clause in the deed, since France allows some structuring for spouses, etc.).

• SARL DETAILS.

• Use of Mortgage Broker: As a non-resident, working with a mortgage broker (courtier) can be immensely helpful. Brokers in France are regulated and typically charge a fee (often a success fee of around 1% of the loan or property value, only if the loan completes)​. Some banks also pay brokers a commission, but by law brokers should disclose fees. The broker will package your application and present it to multiple lenders, negotiate rates, and help you through the paperwork. If your French or understanding of local processes is limited, a broker’s assistance can streamline things. Most brokerage operates on a success basis – if the deal doesn’t go through, you usually owe nothing​
  
  

Summary of Key Criteria: In essence, to successfully secure a French mortgage as a non-resident HNWI, you should have:

• Sufficient stable income to meet the 33% DTI rule (or a strong overall wealth profile to engage private banks if not).

• A down payment of 20-30% (unless you plan an asset-backed financing route).

• All necessary documents proving income, assets, and the details of the transaction.

• Willingness to set up life insurance, a French bank account, and follow French procedures.

With these bases covered, you’ll present as a reliable borrower to French lenders. Next, we explore the variety of mortgage options available – from standard loans to specialized HNWI financing solutions.

Mortgage Options in France for Non-Residents

As an international buyer in France – particularly an HNWI – you have access to a spectrum of mortgage products. These range from conventional home loans offered by French retail banks to tailor-made financing from private banks. Here we outline the main mortgage options and their features, so you can determine which best fits your situation:

1. French Retail Bank Mortgages (Standard Home Loans)

Most non-resident buyers will start by considering a standard French mortgage from a retail bank. These loans are quite similar to what a French resident would get, with a few tweaks for non-residents.

• Repayment Structure: Retail bank loans are predominantly capital-and-interest (repayment) mortgages. This means each monthly payment includes interest and a portion of principal, so the loan is fully paid off at the end of the term. Interest-only is generally not available from high-street banks unless special collateral is provided​.

• Interest Rates: Offered as fixed, variable, or sometimes capped. Retail banks often have some of the lowest interest rates because they are highly competitive and their loans comply with regulated interest (usury) limits. For non-residents, the rate might be slightly higher than what a local might get, but often it’s quite close. You may see fixed rates (for 15-20 years) in the range of, say, 3-4% (hypothetically; actual rates vary with market conditions). Many foreigners are pleasantly surprised at French long-term fixed rates, which can be lower than in their home country​ French fixed rates often average ~1%+ lower than U.S./U.K. historically, though current differences vary.

• Loan Term: Up to 20 years typically, sometimes 25 years if you are younger and request it​. Minimum terms can be 5 or 7 years. Shorter terms might have even better rates, but higher monthly payments.

• Maximum Loan Amount: Typically, retail banks have internal limits (they might not publicly advertise a max, but practically loans above €5M might be hard). If you need €10M+, you might need to involve multiple banks or the LTV might be at 50% or go to a private bank. For most purchases under ~€5M, a single retail loan can cover it if you meet criteria.

• Assets Under Management (AUM) Requirement: Retail banks do not usually require you to move investments to them. Their decision is based on your profile and the property alone. This is a key difference from private banks. However, some retail banks like to have some coverage in a savings account which can rise to 15% of the purchase price.

• Example: Suppose you’re buying a Paris apartment for €1.5 million. A retail bank might lend €1.05M (70% LTV) on a 15-year repayment mortgage. At ~4% fixed for 15 years, your monthly payment would be around €7,800. Over 15 years, you pay off the loan entirely. If you prefer a 20-year term, monthly might drop to ~€6,400 (rough estimates). You would need to show sufficient income to cover this payment under the 33% rule, and you’d put down €450k (30%) plus fees.

Who is it best for? Non-resident buyers who have solid documented income and at least 20-30% cash available. If you fit the standard criteria (income, deposit, etc.), retail loans offer the lowest cost of borrowing and straightforward terms.

2. Interest-Only Mortgages for HNWIs

Interest-only loans are attractive to HNWIs because they minimize monthly payments and allow flexibility in how and when you repay principal (for example, you might plan to sell an asset or receive a bonus down the line to pay off the balance). In France, pure interest-only mortgages for non-residents are typically offered under specific conditions:

• Private Bank Interest-Only: Private banks are the main source of true interest-only mortgages for international buyers in France. They often market these as part of a wealth management relationship. Key features:

• You might secure up to 100% LTV interest-only financing if you agree to place assets (cash/investments) with the bank​. For instance, the bank lends 100% of the property price, but simultaneously you keep, say, 30%-50% of that loan amount in an investment portfolio under the bank’s management as collateral.

• Interest-only terms might be shorter by design. Some private banks will do interest-only for an initial period (e.g. 5-10 years interest-only, then you might start amortizing or refinance)​. Others might allow interest-only for the full term if there’s a clear repayment plan.

• Because no principal is paid monthly, the entire principal is due at loan maturity (or upon sale of the property). Usually, the expectation is you will either sell the property or refinance or use other funds to clear the debt at that time.

• Higher cost: Interest rates on interest-only loans can be higher than on repayment loans, since the bank’s risk is a bit higher (principal outstanding doesn’t reduce). Also, private banks may charge arrangement fees, etc., that are higher. However, HNWIs sometimes accept a slightly higher rate in exchange for not tying up capital in the property.

• Retail Bank Interest-Only (Rare): A few domestic banks might offer an interest-only structure if you provide a very large deposit or specific collateral (like a cash pledge or life insurance policy). This is essentially a prêt in fine. Often they require you to invest in a life assurance bond with a value that will equal the loan by the end. This is complex and usually not as appealing as what private banks offer. So, 99% of the time, if you want interest-only, you’ll be looking at a private banking solution or a hybrid solution through a broker.

• Pros and Cons: The obvious advantage is low monthly payments. For example, a €2M interest-only loan at 4% costs about €6,667 per month (interest) whereas a 20-year repayment at 4% would be ~€12,100 per month. That frees up cash flow significantly. It may also have tax advantages if you plan to rent out the property (interest is often tax-deductible against rental income in France, whereas principal payments are not). On the flip side, you retain the full debt until you decide to pay it off – meaning your equity build-up in the property only comes from property appreciation or your eventual lump-sum payment. It also means exposure to interest rate changes if on a variable rate, and careful planning is needed to ensure you can repay eventually (e.g., using investment growth or other liquidity events). Private banks will want to see a credible repayment strategy (like a portfolio that could be sold, or expected inheritance, etc.)​
  Who is it best for? Interest-only mortgages are ideal for HNW individuals who have significant assets and want to maximize leverage or keep monthly outgoings low. It’s also suited for those who anticipate being able to pay off the loan through other means later (for instance, an entrepreneur expecting a liquidity event, or an investor expecting high returns on a portfolio). It is not suitable for someone without a clear plan to eventually cover the principal, as you don’t want to be caught unable to refinance or pay off at maturity.

3. Private Bank Mortgages (High-Value Bespoke Loans)

We touched on private banks in context of interest-only, but even when not fully interest-only, private banking mortgages deserve their own category. These are custom loans provided typically by international private banks or wealth management banks that have a lending presence in France.

• Loan Amount and LTV: Private banks typically handle large loan amounts, often starting at €2 million and up​. They can finance very expensive properties, even in the €100M+ range, which might be above retail bank limits. They may offer higher LTV than retail banks if supported by assets. For instance, without assets, a private bank might give 60-70% LTV; with assets, up to 100% financing is possible.
  .

• Assets Under Management requirement (AUM): A hallmark of private bank loans is the requirement to move some of your liquid assets to the bank. Typically, they might ask for 30% to 50%of the loan amount to be placed as AUM (either pledged or just under management)​
  For example, for a €5M loan, they might want you to invest ~€2.5M with them. These assets are often invested in stocks, bonds, etc., and can remain your property but sometimes pledged as collateral. The exact amount and conditions vary case by case​.

• Flexible Structures: Private banks can structure the loan in various ways:

• Pure interest-only for a period.

• A mix (e.g., part of the loan interest-only, part amortizing – a “split” structure).

• Balloon payments, etc.

• Shorter initial term with an expectation to refinance or extend if relationship continues.

• They may also lend to purchasing via certain corporate structures or trusts that retail banks won't accommodate, as long as the overall relationship is attractive for them.

• Rates and Fees: Interestingly, private bank mortgage rates can sometimes be competitive with high-street rates for very strong clients, especially if you bring a lot of AUM. However, often they might be slightly higher (since they are offering flexibility and service). Additionally, expect higher ancillary costs:

• Arrangement fees might be higher (e.g., 1% of loan amount or a flat fee).

• There may be management fees for the investment account.

• However, you might get additional perks, such as a dedicated relationship manager, wealth planning advice, etc., which come as part of being a private banking client​.

• When to use a Private Bank: If your loan need is very large, or your financial profile doesn’t fit the strict mould of French retail banks (e.g., very high net worth but low formal income, complex international finances, desire for interest-only), then a private bank is often the solution. They approach lending more holistically, considering your total wealth. Starting a new private banking relationship in exchange for a mortgage can yield up to 100% loan-to-value financing on exceptional terms for non-residents​.

• Example: You want to buy a €10 million villa in the South of France. A French retail bank might only lend €5M (50%) due to internal limits and your complex income. A private bank, however, might agree to lend €7M (70%) on an interest-only basis for 5 years, if you bring €2M in assets to their investment management. You would then put in €3M cash (30% down) plus any fees. Your monthly cost at 4% interest-only on €7M would be ~€23,300. You keep €2M in an investment portfolio; if that portfolio earns, say, 5% annually on average, it offsets a chunk of your interest cost. After 5 years, you might sell another asset or refinance to pay off the €7M principal (or the property may have risen in value and you refinance again). Meanwhile, you’ve had minimal cash drag due to interest-only payments.

Who is it best for? Ultra-HNW individuals or those purchasing super-prime properties; anyone who values customized financing and is open to a broader banking relationship. Also, buyers who have non-traditional financial profiles that wouldn’t get maximum leverage from normal banks.

4. Hybrid  Solutions

Between traditional banks and private banks, there are some hybrid lenders operating in Europe that offer something in the middle:

• These lenders might offer high LTV (even 100%) by splitting the loan into part repayment and part interest-only. For example, a structure could be 70% on a standard amortizing loan and 30% on interest-only, effectively giving 100% financing, with an AUM pledge for the interest-only part​. This is often structured via private banking arms or niche lenders. The idea is to combine the stability of a partial repayment with the flexibility of partial interest-only.

• The terms usually require assets under management and have a max term ~20-25 years (for the repayment portion)​.

• These hybrid solutions still adhere to the borrower affordability checks (the 33% rule on the portion that’s amortizing)​, but they extend leverage further for those who qualify.

• Essentially, think of it as a compromise if you don’t want a full private bank route or to put as much AUM, but want more than a retail bank offers.

These are used on a case-by-case basis and usually arranged by specialized brokers who know which institutions (often smaller banks or subsidiaries) provide them.

5. Bridging Loans and Short-Term Finance

If you need to move very quickly on a purchase, or only need a short-term loan (say 6-24 months), there are bridging finance options:

• These might come from either a private bank or a specialized fund. They often have higher interest rates (because they are short duration and higher risk).

• For example, if you’re buying at auction or need to close a deal in a few weeks (faster than a normal mortgage process), a bridging loan secured on the property can be obtained in a matter of a couple of weeks. It might provide, e.g., 50% of the purchase price quickly, and then you refinance into a long-term mortgage later.

• HNWIs sometimes use bridge loans if they are waiting for liquidity (like selling a business or another property) but want to seize an opportunity now.

• LTVs for bridging are usually conservative (50-60%), and terms short (up to 1-2 years). Interest rates could be something like 10-15% annual, sometimes with interest roll-up (meaning you might not pay monthly, but instead pay all interest at the end when you exit the loan).

• These loans often require expertise and are not from mainstream lenders, but rather disruptive lenders or funds​.

6. Mortgage Currency and Rate Options

While most loans will be euro-denominated with euro interest rates, a small note:

• A few international banks might offer a multi-currency feature, where the loan could be in USD, GBP, CHF etc., especially if you have income in that currency. But this is rare for French properties and usually only via private banks in special scenarios. It introduces currency risk into the loan itself, so tread carefully.

• All French mortgages, whether fixed or variable, will have an APR (annual percentage rate) that must stay below the official usury rate threshold set by French law for that category of loan. This is rarely an issue for standard loans, but it can cap the rates on risky loans. For example, if interest rates spike dramatically, some banks might not issue certain loans because they would breach the usury cap. This mostly protects consumers and in HNWI cases is not usually a limiting factor, but it’s an interesting French regulation that exists in the background.

To help compare these options, here’s a summary table of key features:

The French Mortgage Process: Step-by-Step for Non-Residents

Obtaining a mortgage in France as a non-resident involves a series of steps that coordinate both your loan approval and the property purchase process. It’s important to understand the timeline and requirements at each stage to ensure a smooth transaction. Below, we outline the typical step-by-step process:

1. Initial Consultation & Budget Planning

Duration: 1-2 weeks (including prep)

Before you even start visiting properties, it’s wise to consult with a mortgage broker to gauge how much you can borrow. In this phase:

• Discuss your goals. Provide an overview of your financial situation (income, assets, etc.) so we can advise on your budget.

• Get an idea of loan size and rates: Based on your profile, you’ll learn the approximate maximum loan (for example, “up to €X based on your income”) and current interest rate offers.

• Obtain a Mortgage Agreement in Principle (AIP): Also known as a “pre-approval” or accord de principe. Some lenders will issue a preliminary approval letter stating you are qualified for up to a certain loan amount, subject to finding a property and full underwriting. This can be useful to show sellers you are finance-ready. An AIP can often be obtained in a few days by providing basic documents​.

(Tip: An AIP is not mandatory in France to start property hunting, but it’s recommended, especially for competitive markets like Paris or the Riviera, where sellers favour buyers who have financing lined up.)

2. Property Search & Offer

Duration: Varies – property search could take weeks to months

During this period, you look for the right property:

• House Hunting: Visit properties, engage real estate agents (agences immobilières), and identify the property you wish to purchase.

• Make an Offer: Once you find your desired property, negotiate a price with the seller (often via the agent). Offers in France can be verbal or written; it’s common to sign a “offer to purchase” (offre d’achat) which the seller countersigns to accept.

• No-Cost Obligation: Offers are typically not binding until a later contract (Compromis), especially if a financing condition is included – so you generally won’t lose money if your offer is contingent on mortgage approval.

(Note: Ensure your offer or subsequent contract includes a financing contingency (clause suspensive d’obtention de prêt), which states that if your mortgage is not approved by a certain date, you can back out without penalty. This is critical for your protection as a buyer using a mortgage.)

3. Sign the Compromis de Vente (Sale Agreement)

Duration: Within a couple of weeks of offer acceptance

The Compromis de Vente is the preliminary contract between buyer and seller. Here’s what happens:

• Contract Preparation: The estate agent or a notary will prepare the compromis. It details the property, agreed price, target completion date, and any conditions (like obtaining a mortgage by X date).

• Deposit Payment: At signing, you’ll typically deposit 5-10% of the purchase price into an escrow (often held by the notary or agent). This is the earnest money. It will count toward your down payment. If you fail to complete without an allowed reason, you could forfeit this, so having the mortgage contingency is key.

• Cooling-off for Buyer: After signing the Compromis, the buyer has a 10-day cooling-off period (délai de rétractation) during which you can cancel for any reason and get your deposit back. This is a consumer protection law. After 10 days, the contract is binding, but still subject to the mortgage contingency if included.

• Typical Financing Clause: Often the clause will give you around 45-60 days to secure a mortgage offer. For example, it might say “contract subject to buyer obtaining a loan of €____ by [date], failing which the contract can be nullified.” This sets the clock ticking for the mortgage process described next.

(Important: Do not skip the financing clause unless you are 100% prepared to buy in cash. Sometimes in a hot market a seller might ask for a no-financing clause for non-resident buyers – avoid this risk unless you truly can purchase cash without a loan.)

4. Mortgage Application Submission

Duration: 1-3 weeks to gather docs and submit, then ~1-2 weeks for initial approval

With a signed Compromis in hand (or even before, if you started early), you now submit your full mortgage application to the lender:

• Complete the Application Form: Provide personal details, property details, loan requested, etc. Your broker will have you fill this out.

• Submit Documentation: All the required documents discussed in the previous section (ID, income proof, bank statements, the Compromis de Vente, etc.) are sent to the bank’s underwriting team​.

• Bank Analysis: The lender conducts affordability analysis (verifying that 33% ratio), reviews documents, and often enters data into their internal credit system. If anything is missing or if they have questions, they’ll come back via you or your broker.

• Property Appraisal (Valuation): The bank will arrange a valuation of the property by a third-party appraiser (expert immobilier). This typically happens shortly after or in parallel with credit approval. According to brokerage timelines, the valuation is usually instructed within a couple of weeks of application​. The cost of the valuation is often borne by the lender, though most private banks will charge the client for the valuation.

• Credit Decision: Assuming all is in order, the bank’s credit committee issues an approval. For standard files, you might get an approval (or at least a positive nod pending valuation) in 1-4 weeks from submission. For larger or more complex loans, it could take a bit longer or involve additional questions. French banks can sometimes be slower with non-resident files, so stay in close communication through your broker.

(During this stage, be proactive. Ensure you promptly answer any requests for additional info. Delays often occur if a document is missing or if underwriters need clarification on your foreign income. A good broker will stay on top of the bank for you.)

5. Mortgage Offer Issuance

Duration: ~1 week after final approval and valuation

Once the loan is formally approved, the bank will issue a Mortgage Offer (Offre de Prêt). This is a lengthy document (often several dozen pages) detailing all terms of the loan.

• Receiving the Offer: The offer is usually sent by courier or registered mail to you (and possibly separately to any co-borrower). French law requires that it be sent in hard copy (wet signature needed), although some digital processes exist with electronic signatures, many banks stick to paper for the final contract.

• Carefully Review: When you receive it, review all details – loan amount, interest rate, duration, repayment schedule, insurance coverage, fees, etc. It should match what was discussed. If something is off, alert your broker/bank immediately.

• Mandatory 10-Day Cooling-off (Reflection) Period: This is a crucial French regulation: you must wait at least 10 days before signing and returning the mortgage offer​. The law actually specifies 10 full days must pass, and you can only sign on or after the 11th day from the date you receive the offer. (The offer letter will state the earliest signing date.) This cooling-off period, known as délai de réflexion, is designed to ensure borrowers have time to reconsider. Do not sign and send it back before 10 days, as the bank will reject it and re-issue the offer, causing delays​.

• Accepting the Offer: On the 11th day or after, you sign the offer (usually a specific page is designated for acceptance) and return it by mail (or sometimes via the notary). It’s wise to use tracked mail or courier to ensure it arrives. If two borrowers, often each must sign (and sometimes send separately).

(Timeline note: By law the offer must remain valid for 30 days, giving you a window to sign. But you’ll likely sign on day 11 and send it back immediately to keep things moving.)

6. Life Insurance and Account Setup

Duration: Runs in parallel with steps 4 and 5

While the credit approval is happening, you’ll also be arranging the required insurance and bank accounts:

• Life Insurance Policy: If the bank requires a borrower life insurance, you’d apply for it around the same time as the mortgage. Many banks have you fill in the insurance application along with the loan. You might need to do medical forms or tests during the loan approval stage. By the time of issuing the offer, the insurance terms (coverage amount, premium) are usually confirmed and included. In some cases, the insurance contract is separate but it must be effective by completion. Ensure this is sorted; if using a third-party insurer, the bank must approve the policy and you might need to sign an assignment of the policy to the bank.

• French Bank Account: Initiate opening a current account with the lending bank (or another French bank if separate). Provide necessary KYC documents for the account. Often, this is done once the mortgage is approved or even just after signing the offer. Your broker can assist remotely. You may need to sign account opening forms (which can sometimes be done online or via mail).

7. Final Steps Before Completion

Duration: ~1-2 weeks after offer acceptance

After you’ve returned the signed mortgage offer, the bank will countersign it and then begin preparations to release funds:

• Notary Coordination: The bank’s mortgage department gets in touch with the notary (notaire) handling the property sale. The notary is responsible for drafting the deed of sale and will also prepare a deed for the mortgage registration. The bank will send the notary the details of the loan and what needs to be secured on the property.

• Funds Release Request: You will instruct the bank when to release the funds to the notary. Usually, the notary provides a statement of account indicating how much the bank should send (loan amount) and how much you as the buyer must send from your own funds (down payment + taxes/fees). Make sure to transfer your portion (the balance of price plus fees minus the loan) to the notary’s escrow account in advance of completion. The bank will send the loan amount directly to the notary on the agreed date of completion.

• Insurance Activation: Ensure your property insurance is active from the day of completion (the notary may ask for the insurance certificate). Also ensure any life insurance is in force by that date.

• Final Document Check: The notary will often have you come or meet (or a power of attorney can be used if you can’t attend) to go through the deed. At this meeting (usually the completion meeting), the notary verifies that the funds have been received (both your funds and the bank’s funds).

8. Completion (Closing Day)

Duration: 1 day (the signing appointment)

This is the day you become the owner. The completion meeting (known as the Acte de Vente signing) takes place at the notary’s office. Here’s what happens:

• Signing the Deed: You (or your representative via power of attorney) and the seller sign the final deed of sale. If you are present, the notary will read through the contract (or a summary) in French. If you’re not fluent, you may need a translator or have a bilingual notary. The deed will mention that you have a mortgage and the amount.

• Mortgage Deed: Sometimes, immediately after, a separate mortgage deed (acte de prêt hypothécaire) is also signed, acknowledging the loan and the bank’s charge on the property. In many cases, the mortgage deed is lumped into the main deed or done just after.

• Funds Handover: The notary confirms they have received the bank’s transfer and your transfer. Those funds are then used to pay the seller the purchase price (minus any deposit you paid, which is accounted for) and to pay the associated taxes and fees.

• Keys Exchange: You receive the keys to the property from the seller. Congratulations, you now officially own the property, and the mortgage is in effect.

9. Post-Completion

After completion, there are a few administrative wrap-ups:

• The notary will register the property transfer and the mortgage charge in the land registry. The mortgage registration incurs a fee/tax which would have been part of your closing costs.

• You will get the title deed (usually some weeks or months later, once formal registration is done).

• Your mortgage repayments will begin as scheduled – the first payment date will be outlined in your offer (often 1-2 months after drawdown). Make sure your French bank account has the necessary funds for each payment. Setting up an automatic transfer from your home bank to your French account is a good idea to ensure it’s funded. Missing a French mortgage payment has serious consequences, up to legal action​, so be diligent in making payments on time.

• If you had an interest reserve or any post-closing requirements (in case of bridge loans or construction loans), follow those plans accordingly.

• If you’re renovating or had a special loan for that, coordinate with the bank for staged drawdowns as needed (the Compromis and loan offer would outline if renovation funds are disbursed in tranches, etc.).

Overall Timeline: It’s recommended to allow about 8-12 weeks from mortgage application to completion​. However due to heavier compliance this can be 16 weeks.This aligns with the common 60-day financing clause window. Some deals can close faster (in 5-6 weeks) if everything goes smoothly and quickly, but 8 weeks is safer. Occasionally, delays with document collection, appraisal scheduling, or the insurance can push it to 12-16 weeks – keep communication open with the seller if any extensions are needed. Most sellers understand if the bank process is slightly delayed, especially if they see progress.

Costs, Taxes, and Legal Considerations for Non-Resident Buyers

When budgeting for your French property purchase and mortgage, it’s essential to account for all the associated costs and understand the legal factors that might affect you as a non-resident. France has its own set of property taxes and purchase fees to be mindful of for wealth tax and inheritance rules. Below we break down the key financial and legal considerations:

Upfront Purchase Costs (Closing Costs)

Beyond your down payment, you’ll need to pay various fees and taxes upon purchase:

• Notary Fees (Including Stamp Duty): Notary fees in France are typically around 6% to 8% of the purchase price for an existing (resale) property​ and 2.5% for an off plan or newly built property. This percentage includes the notary’s own fee (which is regulated and relatively small) plus the bulk of it which is actually stamp duty / transfer tax and registration fees collected by the government. For example, on a €1,000,000 property, expect roughly €70,000 in notary fees/taxes. If you are buying a brand-new property from a developer (VEFA or recently built), the taxes are lower (around 2-3%) because VAT is applied instead of transfer tax, but most HNW purchases (chateaux, villas, etc.) are resale properties. The notary will provide an estimated figure early on and a final account before completion.

• Mortgage Registration Tax: If you take a mortgage, there is a small additional fee to register the lender’s charge on the property. This is often included in the 7-8% but can be itemized. It’s roughly 0.5% to 1% of the loan amount in most cases (it varies by department and loan type but can be 1.25% to 1.50% for a hypotheque which is required for off plan or an equity release). The notary handles paying this from the funds you provide.

• Bank Arrangement Fee: French banks often charge a loan arrangement fee (“frais de dossier”). This can range from a flat few hundred euros to around 1% of the loan amount. typically €2,000–€5,000 for the bank fee​, but it can be higher for large loans or more complex deals. Sometimes private banks charge more (like a 1% fee on multi-million loans can be significant). This fee is usually deducted from the loan on disbursement (so the notary gets net loan minus fee, and you pay the fee indirectly). 

• Broker Fee: If you use a mortgage broker, there may be a broker fee. As mentioned, many brokers charge around 1% of the property price or loan​, , and often only upon successful completion. For example, a 0.5-1% fee on a €1M purchase would be €5k-€10k. Some brokers waive direct fees and take commission from the bank, but with non-resident loans, it’s common that the client pays (because these loans require more work to place). This fee would typically be paid around completion time (the broker will invoice you when the loan is done).

• Translator Fees: If you are not fluent in French, and especially if the contract or the notary require it, you might need translation of documents or an interpreter at completion. This cost is usually small relative to others.

• Miscellaneous: There could be small costs like courier fees, or if a power of attorney is used, the notary might charge ~€150 for preparing that. Also, if you set up an SCI company to buy, there are costs to establish it (notary or lawyer fees, maybe €2,000-€4,000) and ongoing accounting costs. Those are separate from the property transaction itself.

Make sure to set aside roughly 10% of the property price to cover all purchase-related costs (this usually comfortably covers notary 7-8% + miscellaneous and a bit of buffer). This can be reduced to 5% for a new build or off plan property.Unused funds can always go toward initial repairs or furnishings.

Ongoing Costs and Taxes

Once you have purchased, owning property in France comes with some ongoing expenses:

• Mortgage repayments and insurance: Obviously, your monthly (or quarterly) mortgage payments will be a key ongoing cost. Also remember the life insurance premium (if required) which might be monthly or annually, and property insurance annually. These are the costs of financing to budget for.

• Local Property Taxes: France has two main local property taxes: Taxe Foncière (land/property ownership tax) and Taxe d’Habitation (residence tax). Taxe Foncière is paid by the owner annually, and it varies depending on the property size, location, etc., but can be substantial for large properties (several thousand euros per year). Taxe d’Habitation was historically paid by the occupant, but as of recent reforms, it has been mostly phased out for primary residences and may be reassessed for second homes/luxury homes. In some cases, if the property is left furnished, non-resident owners might still get a Taxe d’Habitation bill – check with the local tax office on what to expect. These taxes are usually not enormous relative to property value (often 0.1-0.3% of property value annually combined, depending on commune).

• Wealth Tax (IFI): France imposes a wealth tax on real estate called Impôt sur la Fortune Immobilière (IFI). This tax applies to real estate assets (worldwide for French residents, but for non-residents, only French property) if their net value exceeds €1.3 million​. Only the portion above €800k is taxed on a sliding scale, starting at 0.5% and up to 1.5% for amounts above €10 million. As a non-resident HNWI buying in France, this is very relevant:

• IFI is calculated on your net property value in France as of January 1 each year. Net means after deducting any outstanding mortgage debt on the property. This is one reason mortgages can be beneficial for wealth tax mitigation – the loan reduces your net taxable value​. For example, if you buy a €5M property with a €3M loan, your net value is €2M. IFI would apply only on that €2M, possibly saving you thousands per year in tax compared to owning it outright.

• As a quick illustration: Net €2M real estate wealth might incur a circa seven thousand euros of IFI annually. Net €5M could incur maybe €35k/year. (Precise calculations require applying the rate bands).

• IFI has to be declared usually with a special form with your income tax (or separately if you have no income tax filing requirement in France). Consult a tax advisor on this; it’s usually due by mid-year for the relevant year.

• There are some exclusions and deductions (e.g., if you rent the property out long-term, parts might be exempt, etc.), but generally, expect to pay IFI if your French property equity is high.

• Income Tax on Rentals (if applicable): If you plan to rent out your property (even seasonally on Airbnb or long-term lease), as a non-resident you may have to file French tax returns for that rental income. France will tax rental income at least at a minimum rate of 20% for non-residents (unless reduced by treaty). The interest on your mortgage is deductible against rental income, as are other expenses, which can greatly reduce taxable income, especially if you have an interest-only mortgage (then almost the entire mortgage payment might offset rental income). HNW owners often engage an accountant to handle French filings. Double-tax treaties (like France-UK, France-USA) typically allow you to avoid being taxed twice on that income.

• Capital Gains Tax (CGT): If eventually you sell the property for a profit, non-residents are subject to French capital gains tax on real estate. The base rate is 19% plus social charges 17.2% = 36.2% as of now, but it reduces after holding the property for more than 5 years (taper relief over 22 years for the 19% part and 30 years for the social part, after which no tax). Additionally, if you are a resident of a country with a tax treaty, sometimes the social charge portion can be mitigated. Keep in mind if the property is a significant part of your estate planning.

• Estate Planning: France’s inheritance laws are different (forced heirship rules) which can affect how property passes to your heirs. An SCI or draft in the purchase contract can help non-residents manage this. While not directly a “cost,” it’s a consideration to plan for. Also, if a non-resident passes away owning French property, the estate may face French inheritance taxes (which can be high, but vary by heir relationship; spouses are exempt, children have allowances then progressive rates). We recommend consulting an estate planner if the property is a large part of your assets.

• Maintenance and Management: Luxury properties require upkeep – from homeowners association fees (if an apartment or in a domain) to utilities, security, gardening, etc. If you’re not there full time, you might hire a property manager. These costs can add up, but they’re part of ownership rather than the mortgage process per se.

Legal Protections and Peculiarities

A few legal points to keep in mind as a non-resident buyer:

• No Ownership Restrictions: France does not restrict foreign nationals from owning property. You can purchase in your name just like a French person. (Unlike some countries that have special rules for foreign buyers, France is open. The only minor exception: certain rural or agricultural purchases might need prefecture approval if large, rarely relevant for typical buyers.)

• Currency Transfers: While not a law, be aware of exchange control reporting. If you bring in large sums from abroad (like your down payment), French banks may ask you to sign a declaration of the origin of funds. This is standard anti-money laundering procedure. Just keep records of transfers and sources.

• Signing by Power of Attorney: If you cannot be in France to sign the Compromis or the closing deed, you can grant power of attorney to someone (often a notary clerk or lawyer) to sign on your behalf. This is common for international buyers. The POA must be notarized and sometimes apostilled in your home country, then translated. It should specifically list the actions they can take. Plan this in advance to not delay the process.

• Default and Enforcement: Though one does not plan for it, note that if you default on the mortgage, the bank has the right to seize and sell the property via legal proceedings. As a non-resident, this process is the same as for residents. France is generally borrower-friendly in that they give chances to cure default, but ultimately a mortgage is a serious obligation. If a forced sale doesn’t cover the debt, the bank can pursue your other assets (including abroad, though that’s more complex). Therefore, never overextend beyond what you can handle in a worst-case scenario.

• Mortgage Portability or Refinance: In France, mortgages can sometimes be “portable” – meaning if you sell one property and buy another, the bank might allow you to transfer the mortgage to the new property, maintaining the same terms (useful if you have a great low rate). This requires bank approval and is easier if the new property is of equal or higher value. Refinancing with a different bank as a non-resident is possible but not very common unless rates drop significantly; it would essentially mean going through a similar approval process with a new bank and paying new notary fees to register the new mortgage. Because of those extra costs, people typically refinance only if there’s a big interest rate savings or they are extracting equity.

• Usury Rate Compliance: One interesting French legal rule: France sets a maximum APR (annual percentage rate) for different types of loans each quarter (called the taux d'usure). Mortgage offers to individuals cannot have an APR above this threshold. This usually only matters in high-rate environments or for unusual loans. For standard mortgages, banks ensure their rates stay below this. But if you ever propose something like a short-term loan with high fees, the bank might say no because of usury limits. Recently, as rates climbed, some large loans with lots of insurance have bumped near the usury limit, causing timing issues (if limit is lower than needed rate, you must wait until next quarter when limits adjust). Your broker will watch this, but it’s a consumer protection to be aware of.

In sum, aside from the taxes and fees which require budgeting, France’s legal environment is well-structured for property buyers, offering good protection and clear processes. Make sure you engage a competent notary (usually the seller chooses one, but as a buyer you can have your own notary at no extra cost – the two notaries simply share the fee) and consider getting separate legal/tax advice if making a very large or complex investment.

Example Scenarios: French Mortgage Cases for HNW Buyers

To illustrate how non-resident mortgages can work in practice, let's consider a few example scenarios. These examples will show different approaches – from a straightforward bank loan to a complex high-value financing – highlighting the numbers and options involved.

Scenario 1: Paris Apartment Purchase with Standard Mortgage

• Buyer Profile: A British executive working in London with a £300k annual salary, looking to buy a pied-à-terre in Paris. She has substantial income and some savings, but no desire to move investments for the sake of the mortgage.

• Property: €1,200,000 apartment in Paris (8th arrondissement).

• Down Payment: 30% (€360,000) plus ~8% costs (€96,000). Total cash needed ~€456,000.

• Mortgage: 70% LTV loan = €840,000 from a French retail bank.

• 20-year repayment mortgage at a fixed rate of 3.8% (for example).

• Monthly payment ~€5,040 (which is about 3,8% of €840k annually divided by 12, amortized over 20 years).

• Affordability: Her monthly gross income is roughly €28,000 (equivalent). The mortgage of €5k plus maybe €1k other debts is €6k, which is ~21% of income, well under 33%. She qualifies easily.

• Process: She obtains an agreement in principle, signs a Compromis with a 60-day financing clause, gets formal approval in 3 weeks, and completes in 2 months.

• Outcome: She now owns the apartment. Over 20 years she’ll pay off the loan. She opted for the bank’s group life insurance policy costing ~€100/month due to her age and loan size (this was factored into the affordability).

• Wealth Tax: The apartment is €1.2M, loan €840k, net value €360k which is below the €1.3M IFI threshold – so she owes no wealth tax on this asset​
  frenchentree.com
  . If she had bought without a loan, she would have a €1.2M net property and still no IFI (since under threshold), but as it grows in value, she’ll consider that.

Scenario 2: Riviera Villa with Private Bank Financing

• Buyer Profile: A non-EU entrepreneur (for instance, from the Middle East) with significant wealth mostly in investments, moderate formal income. He wants a vacation home on the Côte d’Azur and prefers to keep monthly payments low.

• Property: €5,000,000 villa in Saint-Tropez area.

• Down Payment: He could pay cash, but prefers leverage. He’s willing to put down just 20% (€1M) and finance 80% via a bank, to keep liquidity for his business.

• Mortgage Option: Approaches a private bank with a wealth management arm.

• The bank offers 50% LTV (€2.5M) on a pure interest-only mortgage for 5 years, and an additional 30% (€1.5M) on a 20-year repayment mortgage. This effectively gives him 80% financing, but structured in two loans (one interest-only, one amortizing) – a hybrid solution.

• Alternatively, another private bank offered 80% interest-only for 5 years if he places 20% (€1M) in an investment portfolio. This means he puts €1M in a portfolio (which he retains ownership of), €4M loan from the bank, and he adds €1M cash to complete the purchase. Let’s assume he takes this offer.

• Loan Details: €4,000,000 interest-only at 4.5% (a bit higher rate because of high LTV and interest-only).

• Monthly interest payment ~€15,000. He sets this to auto-debit from his account which is funded by income from his other investments.

• He places €1,000,000 in an investment account at the bank; these funds are earning perhaps 5-6% in a balanced portfolio, aiming to offset the interest cost partially.

• Affordability: The private bank looked at his assets (€10M+ net worth) and global cash flow rather than a strict 33% of salary (his official salary is low, but he has other income). They were satisfied due to his overall wealth and the assets under management.

• Process: Took ~4 weeks to underwrite due to complexity. No issues in property appraisal (valued at purchase price). Completed within 3 months.

• Outcome: He enjoys very low monthly out-of-pocket cost relative to property value. In 5 years, he plans to either sell another asset or refinance. If the property value increases to, say, €6M in that time, he might sell a small part of his portfolio and reduce the loan, or refinance into a new loan with a longer term. The risk is if markets dip, but he has buffer assets.

• Wealth Tax: Initially, his net equity in the property is only €1M (since €4M debt). So for IFI, he declares €1M which is below threshold (no IFI)​. Even if he had some IFI, the €4M loan heavily mitigates it. Essentially, he’s leveraged in a way that French wealth tax on this property is negligible for now.

Scenario 3: Chalet in the French Alps with a French Bank (Complex Income)

• Buyer Profile: An American tech professional, semi-retired early with significant stock portfolio and startup equity, but relatively low current salary. He lives off investments and wants a ski property.

• Property: €3,000,000 chalet in Courchevel.

• Down Payment: 40% (€1.2M) to strengthen his case, plus ~€240k for fees/taxes.

• Mortgage: A French retail bank is hesitant due to his low formal income and American status (some banks are cautious with U.S. citizens due to FATCA). However, through a broker, he finds a lender willing to do 60% (€1.8M) on a 15-year repayment at 4.0% fixed, provided he pledges additional collateral.

• He offers a portfolio of European blue-chip stocks he holds (worth €500k) as collateral. The bank is comforted by this and also because the property is in a prime ski resort (high resale value).

• They also require life insurance – but being American, some French insurers won’t cover U.S. residents. The broker helps him use a Luxembourg-based insurer for the mortgage life policy.

• Monthly Payment: ~€13,300 per month. He doesn’t have a salary to cover this, but he has dividend and investment income that actually totals about €20k/month. The bank took an exception given the collateral and that his assets are 10x the loan.

• Process: Was a bit more tedious – took 3 months to finalize due to additional compliance checks for U.S. citizen (extra FATCA forms) and coordinating the stock pledge.

• Outcome: He secures the chalet. He plans to rent it out part of the year; the rental income (€150k per ski season) will more than cover his annual mortgage payments (€160k/year). By using the rental income and some investment income, he manages the debt comfortably.

• Wealth Tax: Property €3M, loan €1.8M, net €1.2M which is below €1.3M – just on the edge but likely no IFI or very minimal. If the property appreciates pushing net above €1.3M, he’ll start paying a small IFI. However, he’s effectively using France’s system to own a large asset with moderate ongoing cost.

These scenarios show that, as an HNWI non-resident, you can tailor the financing to your needs – whether prioritizing low interest rates through a standard loan or maximizing leverage and flexibility via private banks. The best solution depends on your financial profile and plans for the property.

(Note: The figures above are hypothetical and for illustrative purposes. Actual interest rates and terms will vary with market conditions and individual negotiations.)

Conclusion: Next Steps to Secure Your French Mortgage

Financing a property in France as a non-resident HNWI is an attainable goal with the right approach and information. As we’ve covered, France’s mortgage market offers competitive options and unique advantages (like long fixed rates and wealth tax benefits), but also comes with its own set of rules, from the 33% income test to life insurance requirements and notary protocols.

To recap, here are a few key takeaways:

• Prepare Thoroughly: Arm yourself with a strong financial dossier – income proof, asset statements, and a healthy deposit. A well-prepared application instills confidence in lenders.

• Choose the Right Lender: Match your profile to the appropriate lending solution. If you have straightforward finances and can put 30% down, a retail bank loan might be perfect. If you have significant assets or need a larger, flexible loan, consider private banks or hybrid options.

• Use Expert Help: Engage a specialist broker or advisor who understands non-resident lending. They can save you time, connect you with the best offers (including those not advertised to the general public), and navigate any language or bureaucratic barriers.

• Mind the Process: Be aware of the French process quirks – like the compulsory cooling-off periods (for both the property contract and loan offer). These are just part of the timeline. Plan your purchase and sale agreement accordingly and stay patient yet proactive through each step.

• Consider the Bigger Picture: Factor in taxes (stamp duty, wealth tax, etc.) and how a mortgage might play into your financial planning. Sometimes taking a larger loan has ancillary benefits like liquidity retention and tax efficiency for HNWIs. Balance that against the cost of interest.

• Enjoy the Benefits: Once set up, a French mortgage can be a cheap form of leverage (especially if fixed at a low rate) and can allow you to own a trophy asset without fully divesting other investments. For many, the French lifestyle and stable market returns make it a rewarding investment, both personally and financially.

Now, if you’re ready to take the next step:

• Contact Our Team: We specialize in guiding high-net-worth international clients through the French mortgage maze. Whether you’re just exploring options or need a pre-approval quickly, our experts are here to assist. (Call-to-Action: Feel free to get in touch with us for a confidential discussion about your plans.)

• Explore Further Reading: Knowledge is power. If you found this guide useful, you might also appreciate our other country guides (such as on Spain, Italy, Portugal, Monaco, and Switzerland) to compare opportunities. Additionally, check out our article on “French Wealth Tax (IFI) Strategies” to learn how mortgage debt and other tools can optimize your holding of French real estate​.

• Plan a Visit: If possible, come visit the areas in France you’re interested in. Often understanding the local market (and even meeting local bank representatives) can give you an edge. We can help arrange introductions to on-the-ground professionals (notaries, agents, tax advisors) as needed.

Embarking on a French property purchase is exciting. With a clear roadmap and the right partners, you can finance your dream home or investment in France with confidence. We hope this guide has armed you with valuable insights and look forward to helping you turn plans into reality.

Bonne chance with your French property journey!

France FAQ

Eligibility for a Mortgage

Who can get a French mortgage? Both residents and non-residents can apply for mortgages in France. Banks will assess your income, debts, and credit history (even if abroad) to determine eligibility. Generally, non-EU foreigners can obtain a French home loan, but they may face stricter requirements (such as higher down payments). Lenders also impose age limits – the loan must usually end by retirement age or a set age (often around 70-75). Important: Most lenders require you to open a French bank account and obtain a fiscal number if you don’t already have one.

Foreign buyer conditions: French banks often ask that your total debt payments (including the new mortgage) do not exceed about 33-35% of your income (a rule enforced by French regulators) (Mortgages: new rules soon to be mandatory - Anytime). Some banks may also request additional collateral or savings for non-resident borrowers. In some cases, banks require foreign borrowers to deposit 12–24 months of mortgage payments into a French account as a guarantee. While having a French residency is not required, being an EU/EEA citizen or having stable foreign income can make the process smoother. Keep in mind that property ownership in France does not grant residency rights – you’ll need to follow visa procedures separately.

Maximum Loan-to-Value (LTV)

How much can you borrow? The maximum LTV in France depends on your residency status and financial profile. Non-resident foreign buyers are typically offered around 50% to 75% LTV, meaning a 25-50% down payment is required. In practice, many non-EU buyers find LTVs around 60-70% common. By contrast, French residents (or EU citizens with local income) can often borrow more – up to 85% and in some cases even 100% of the property price (though 100% loans usually require excellent credentials or additional guarantees). 

Interest-only loans and LTV: If pursuing an interest-only “in fine” mortgage, the LTV is generally lower. French banks often cap interest-only mortgages around 50%–60% LTV, since the principal isn’t paid down during the term. Overall, plan for a substantial deposit. A 20%–40% down payment is typical for foreign buyers in France. Higher LTVs might be achievable if you have strong income, low debts, or if a French guarantor or additional collateral is involved.

Typical Interest Rates

Current rates: French mortgage rates have risen from their historic lows. As of mid-2024, the average interest rate on new housing loans was around 3.5% (France: average mortgage interest rate 2024 | Statista). Non-resident borrowers may face slightly higher rates (banks often add a small risk margin for foreign income). For instance, rates for non-residents in 2023 were in the ~4–5% range, with expectations to ease toward 3.5–4% by late 2024. By comparison, one year earlier the average was ~2.9%, showing how quickly rates changed (France: average mortgage interest rate 2024 | Statista).

Fixed vs. variable: The majority of French mortgages are fixed-rate, locking in your rate for the full term (often 15–20 years). These provide stability, especially since Euro interest rates can fluctuate. Variable-rate loans exist, though usually only through private banks (usually indexed to Euribor). Given currently higher rates, many buyers still opt for fixed deals to secure rates around 3.5–4%. Example: In Q2 2024, average fixed rates were ~3.5% (France: average mortgage interest rate 2024 | Statista). Some specialized products (e.g., hybrid fixed/interest-only) might start around 2.3% for the interest-only portion, but then you must factor required insurance costs.

Interest-Only Mortgages

Are interest-only loans available? Yes, France offers “in fine” mortgages, which are interest-only loans where the principal is repaid in one lump sum at the end. However, they come with strict conditions. Banks usually require the borrower to have significant assets or investments. Often, you must either pledge an equivalent amount in cash/investments to the bank or have a life insurance policy that will cover the principal. As a result, interest-only mortgages are generally used by high-net-worth individuals or for specific investment purposes.

Typical terms: Interest-only loans in France typically allow up to 10–15 years interest-only, and commonly up to 50%–60% LTV. For example, a bank might lend 50% of the property value interest-only and require you to invest a sum with their private bank division. Rates on interest-only mortgages can be slightly higher than standard loans. One lender offers hybrid interest-only deals starting around 2.30% (plus the cost of required life insurance). Remember that you’ll need a strategy to pay off the principal at the end – often this is done by liquidating investments or through a planned refinance or sale.

French nuances: French banks almost always require an assurance-vie (life insurance) policy for an in-fine loan that covers at least 100% of the loan (often 120%). This ensures the loan will be repaid in case of the borrower’s death. The cost of this insurance and the tied-up capital in investments mean the true cost of an interest-only mortgage can be high. In summary, interest-only mortgages are available but only for financially strong buyers who can meet the collateral and insurance requirements.

Required Documentation

What paperwork do you need? French mortgages require a thorough documentation package. Be prepared to provide: Identification (passport); Proof of address (utility bill or similar); Income proof – if employed, your last 3 payslips and an employer’s work contract, plus last 2 years of tax returns; if self-employed, several years of company accounts/tax filings. You’ll also need bank statements (usually last 3–6 months) to show your income and savings, plus statements for any existing loans. Lenders will want to see proof of funds for your down payment (e.g., bank statement showing the deposit amount).

Specific French requirements: You must obtain a French bank account (to service the mortgage) and a French tax identification number if you don’t have one. Life insurance forms – because life insurance is typically mandatory for French mortgages, you’ll fill out a medical questionnaire or exam for the policy. The bank will also require the property details: a copy of the signed sale agreement (Compromis de Vente or Promesse), and later the property title and evaluation (the bank may conduct its own appraisal). If you’re non-resident, some banks ask for a credit report or reference letter from your current bank. Every document not originally in French must be translated by an accredited translator.

Tip: French banks can be very detailed. They may ask for explanations of large account movements, or proof of rental income, etc. It’s a good idea to include a cover letter explaining your profile and an income/expense summary. Organize your documents in the order the bank requests. By providing a complete file, you can speed up approval.

Time to Get a Mortgage

How long does it take? Obtaining a mortgage in France can be a somewhat lengthy process – typically around 2 to 3 months from application to funds availability. Pre-approval (getting an initial agreement in principle) might take a couple of weeks if your documents are in order. But the formal approval, involving credit committees and compliance checks, often takes 4–8 weeks. One guide notes an average timeframe of 6–8 weeks to get to the mortgage offer stage while other sources say 12–14 weeks is not unusual for non-resident cases.

Once you receive the official mortgage offer, French law imposes a 10-day cooling-off period before you can sign it. This is a protection for the borrower – you cannot accept the offer until at least 10 days have passed after receipt. After you sign to accept, the funds can be released. Coordination with the notary is crucial: the bank will send mortgage funds to the notary by the act closing date.

How to avoid delays: To speed up the process, submit a complete file and respond quickly to any additional requests. Also, ensure the property’s compromis de vente has a sufficiently long financing clause (often 45–60 days) to give you time to secure the loan. Many foreign buyers include a clause that the purchase is contingent on getting a mortgage by a certain date. If delays occur, your notary can request an extension from the seller. Overall, plan on about 2 months minimum and build in some buffer to be safe.

Life Insurance

Is life insurance required? In most cases, yes – French lenders mandate a life insurance policy to cover the mortgage). The policy typically must cover at least 100% of the loan amount (often 120%), and the lender is named as beneficiary. This insurance ensures the loan will be repaid if you (or a co-borrower) pass away. The cost is usually added to your monthly payment. For example, life insurance might cost ~0.2–0.5% of the loan per year, depending on age and health, which is an additional expense to budget for.

Key points: You are not required to buy the insurance from the bank’s affiliated insurer – French law allows you to get a policy from any provider, as long as it offers equivalent coverage. However, many banks will propose their group policy, and sometimes it’s easier to accept for initial approval (you can later re-shop for a better rate and switch policies due to France’s Hamon and Bourquin laws on insurance portability). Life insurance in France often covers death and disability. Each borrower can be insured for a percentage of the loan (e.g., a couple might each insure 50% or 100% of the balance).

Important: If you’re older or have health issues, insurance can be a significant hurdle (higher premiums or exclusions). In some cases, for large loans, banks may accept other guarantees instead of standard life insurance (like a pledge of financial assets). But generally, life insurance is a de facto requirement for French mortgages – virtually all lenders will insist on it Ensure you factor this in when comparing costs, as it affects the overall APR of the loan.

Buying Through a Company or Trust

Can I use an Limited company, SCI, or trust to buy? It’s possible and very common to purchase French property via a company (such as setting up a French SCI – Société Civile Immobilière) or even through certain foreign companies/trusts, but it adds complexity). French banks prefer lending to individuals; many lenders are reluctant to lend to foreign entities or complex ownership structures. If you plan to use a company, it might need to be a French property-holding company (like an SCI with personal guarantors or an SARL de Famille) to get local financing but in can be possible with certain lenders to purchase using the income from an operating company.

Downsides: France imposes a higher stamp duty on sales to non-transparent entities. For example, buying in your own name or via a transparent SCI incurs ~4.5% registration tax, whereas using a foreign company might incur around 7.5%–9% transfer tax. Annual taxes can also apply – foreign companies owning French real estate are subject to the annual 3% tax on property value unless they report shareholders. In short, using a company can be expensive and is only worthwhile for specific cases (like multiple investors, or estate planning reasons).

Trusts: France does not formally recognize common-law trusts in property ownership – assets held in trust can face punitive taxes (the 3% annual tax). French law will also look through trusts for inheritance and wealth tax purposes.

Summary: Most foreign buyers purchase in their personal name. Buying through a company or trust is possible. If you think you need a structure (for liability or inheritance reasons), consult a French notary/tax advisor beforehand. And expect that if a lender agrees to lend to a company, you (the beneficial owner) will likely need to personally guarantee the loan.

Taxes

What are the most common taxes when buying a property in France?

Purchase taxes: When buying property in France, the buyer pays notaire fees which include transfer taxes. For a resale property, total notary and registration taxes are about 7%–8% of the purchase price. (This consists mostly of a stamp duty ~5.8% plus notary’s tariff and registration costs.) New-build properties have lower fees – roughly 2%–3% (since instead of stamp duty, VAT is paid by the developer). These fees are paid at completion to the notary, who handles paying the tax authorities 

Annual property taxes: Owners pay Taxe Foncière, an annual local property tax. The amount varies by commune and property size – it can range from a few hundred to a few thousand euros per year. (There was also Taxe d’Habitation, but as of 2023 it’s abolished for most primary residences, though second homes may have a residual tax or surtax in some areas.) If you rent out the property furnished, there could be an annual business tax (CFE) in some cases.

Wealth tax: France has an annual wealth tax on real estate (IFI) for property assets over €1.3 million in net value. Only the portion of net property wealth above €1.3M is taxed, on a sliding scale roughly 0.5% to 1.5%. Notably, mortgages reduce the taxable base – you’re taxed only on net equity. Mortgage debts related to the property are deductible for IFI, which is one potential tax benefit of financing. Non-residents are only subject to IFI on their French properties (with the same €1.3M threshold).

Rental income tax: If you rent out the property, rental income is taxable in France regardless of your residency. Typically, rental profits are taxed at the income tax scale (progressive up to ~45%) plus social charges (~17.2%). However, foreign landlords from treaty countries can often avoid French social charges and instead pay a 7.5% prélèvement. France allows deduction of expenses (including mortgage interest, insurance, etc.) from rental income. Alternatively, furnished rentals can opt for a favourable flat tax regime (Micro-BIC) if revenue is under a limit.

In summary, expect ~7–8% upfront purchase taxes), annual local taxes, and possibly wealth tax if the property is high-end. France’s tax system is complex, so engage an accountant if you’ll have rental or wealth tax exposure.

Currency Fluctuations

What are the main currency and FX considerations when buying property in France

Currency risk for foreign buyers: If your income or savings are in a currency other than euros, be mindful of exchange rate fluctuations. Your French mortgage will be in EUR, so if (for example) you earn in USD or GBP, a weaker home currency means your mortgage payments effectively cost more. Over a 15–20 year loan, exchange rates can swing significantly. It’s wise to budget a cushion for currency movements. In practice, many expats choose to hedge this risk or use forward contracts to lock in rates for transfers.

Financing currency options: French banks sometimes offer mortgages in foreign currency for non-residents, but typically only if you earn primarily in that currency. Under EU rules, lenders must inform you of currency risk and some allow switching the loan to euro if the exchange rate moves beyond a certain threshold (usually 20%). However, such multi-currency loans are not common in France’s retail banking. Most borrowers simply take a euro loan.

Mitigation tips: – Match currency if possible: If you have the choice, pay from euro-denominated assets or income. – Regular transfers: Use providers that offer good exchange rates and possibly set up a regular transfer when rates are favourable. – Buffer: Plan for a scenario where your home currency drops, say, 10–20% versus the euro, and ensure you could still cover payments. As one source notes, if you take a euro mortgage but have non-euro income, you face “ongoing risk” with each repayment.

In short, factor currency volatility into your financial planning. A mortgage is a long commitment, and exchange rates can change the effective cost dramatically over 

Renting Out the Property

Can you rent out a home with a French mortgage? Yes. French mortgages for non-residents are often structured as loans for a second home or investment, so renting is expected or allowed. There is no blanket prohibition on renting out your property simply because it’s mortgaged. Do inform your insurance company if you plan to rent (as you’ll need appropriate landlord insurance or a clause for tenants). The bank may also ask whether the property will be used as a second home or rented, but this is mainly for risk assessment – it’s not usually restrictive.

Long-term rentals: If you rent long-term to a tenant, France’s standard rental laws apply (e.g., for unfurnished rentals, initial lease of 3 years, tenant protections, etc.). Make sure to declare the rental income on your French taxes. The rental profits are taxable in France and you must file an annual return. The good news is that many expenses are deductible – including mortgage interest, property taxes, insurance, and maintenance. This can significantly reduce the taxable income from rent (often making the tax quite low or neutral for heavily financed properties).

Short-term (holiday) rentals: If you do short-term lets (Airbnb style), check local regulations. Cities like Paris have stricter rules (e.g., a registration and 120-day limit for non-primary residences). From the mortgage perspective, occasional short-term renting is still allowed – just ensure the property is insured for it. Some communes may charge a tourist tax per night, and you’ll pay income tax on the rental earnings.

Tax considerations: For non-residents, rental income is subject to French tax even if you pay tax at home. France has treaties to avoid double taxation, but you’ll likely pay tax in France first. Non-resident landlords from EU/EEA are taxed at a flat 20% on net income (after expenses) or according to the scale with a minimum 20% rate; those from outside the EU face a 30% rate (or 20% minimum, subject to treaties). Always check the latest rules or hire a French accountant. Note: If you rent out the property, the mortgage interest is tax-deductible against that rental income, which is a key benefit of having a mortgage.

In summary, renting out your French property is not a problem with the bank as long as you adhere to local rental laws and insurance. It can even be financially savvy, since rental profits can offset mortgage costs, and expenses (interest, etc.) are deductible for taxes. Just keep everything compliant by declaring the income.

Tax Benefits of a Mortgage

Does having a mortgage help with taxes? In France, there isn’t an income tax deduction for home mortgage interest for most homeowners (unlike, say, the USA). France did have a tax credit for mortgage interest in the late 2000s, but it was discontinued. Currently, interest on a loan for your primary residence is not tax-deductible for personal income tax. So, there is no reduction in your income taxes due to a regular home mortgage.

However, there are two notable tax benefits to consider:

1. Wealth Tax (IFI) reduction: If you are subject to the French real estate wealth tax (IFI), a mortgage will reduce your net taxable wealth. The IFI is applied on net property value – you can subtract the outstanding loan balance from the property’s value when calculating IFI. In essence, carrying a mortgage can save money by lowering wealth tax for those with property holdings above €1.3M. For example, if you have a €2M property and a €1M mortgage, you’re taxed on €1M net instead of €2M. This is a significant consideration for high-net-worth owners.
   
   

2. Rental income offset: If the property is rented out, mortgage interest is deductible against rental income. France allows landlords to deduct loan interest, property taxes, insurance, and maintenance expenses from rental. This can potentially make rental profits very low or nil for tax purposes, especially in the early years when interest is high. Essentially, the rental income tax is only on the profit (rent minus expenses), so a mortgage becomes a tax-efficient way to finance a rental investment, as the interest portion reduces taxable income.
   
   

Other benefits: If you are a French tax resident and this is your main home, while you can’t deduct interest, you do get a capital gains tax exemption when you sell your principal residence. Having a mortgage doesn’t change that, but it means you leveraged into an asset whose gain is untaxed on sale – an indirect benefit. Also, for foreign buyers, using a mortgage can help avoid tying up all your capital, which might have tax-efficient uses elsewhere.

In summary, while France doesn’t give a straightforward mortgage interest tax credit to most homeowners, a mortgage helps reduce wealth tax and is fully deductible against rental income. For many investors, these benefits – plus the ability to keep cash invested elsewhere – make mortgages attractive. Always consult a tax advisor to understand how these factors apply to your situation.

Capital Gains Tax

When you sell, will you owe tax on the profit? Potentially, yes. In France, capital gains tax (CGT) applies to the sale of real estate that is not your primary residence. For non-residents, the capital gain is taxed at a flat 19% plus social charges (7.5% for EU/EEA sellers, or currently 17.2% for others). Practically, EU residents end up around 26.5% total, and non-EU around 36.2% on the gain. France withholds some of the sale proceeds at closing (usually the notaire withholds 19%/plus charges) to cover the tax – a fiscal representative may be required to calculate the exact amount if the sale price exceeds €150k (unless you’re EU resident).

Exemptions and reductions: If you are a French tax resident and the home was your primary residence, the sale is 100% exempt from capital gains tax. This is a big benefit of establishing the property as your main home. Otherwise, for second homes/investments, France provides taper relief over time. The CGT portion of the tax gets a 6% reduction for each year held beyond 5 years, and is totally exempt after 22 years of ownership. The additional social tax portion tapers from year 6 to year 30, becoming exempt after 30 years. In short, if you hold the property long enough, you can eliminate the capital gains tax (22 years for the base tax, 30 years for social charges).

There is also a special exception for EU/EEA non-residents: they may qualify for a CGT exemption on one property sale in France, up to €150,000 of gain, if they have been French residents for at least 2 years in the past or if the property was acquired before 2015 and the seller owned it for over 30 years (this is a niche case).

Example: You bought a holiday home and sell it after 10 years with a €100k gain. As a non-resident, you’d pay 19% of the gain plus social tax. But since you held 10 years, you get 6% × (10−5) = 30% reduction on the CGT part. So CGT on €100k would be on €70k = €13.3k. Social tax 17.2% on full €100k = €17.2k. Total ≈ €30.5k. If you held 30+ years, no tax. If it were your main home, no tax regardless of duration.

Reselling quickly: Note that selling in under 5 years yields no reduction – it’s fully taxable. And if you sell within less than 5 years of purchase, French notaires will apply a preliminary capital gains tax calculation and withhold amount at sale. There’s no additional “flipping” penalty beyond the tax itself, but transaction costs and taxes can be significant, so quick resales can be costly.

In summary, expect a ~19%–36% tax on gains unless an exemption applies. Plan your hold period accordingly: France rewards long-term ownership with full CGT exemption after 22/30 years.

Restrictions on Reselling

France does not impose restrictions on when or to whom you can resell your property. You are free to sell at any time, whether that’s a few months or many years after purchase, and you can sell to locals or foreigners alike. There are no government penalties purely for reselling “too soon.” Example: If you buy a house today, you could in theory put it back on the market next year – legally, that’s fine. As one FAQ says: “No, you may sell your French property whenever you like to whoever you wish.” There is no requirement to hold it for a certain number of years.

However, practical considerations may discourage very quick resales. Mortgage early repayment fees: French mortgages often have early payoff penalties – typically around 3% of the remaining balance or six months’ interest, whichever is lower. So if you resell and pay off the loan in the first few years, you might incur this fee. It’s not a prohibition, just a cost to factor in.

Tax implications: As discussed in the capital gains section, selling within 5 years means no tax taper relief – you’ll pay full capital gains tax on any appreciation. If you sell within 5 years and it was not your main home, expect the capital gains tax with no reductions. This isn’t a restriction, but it is a financial disincentive to quick resale (flipping is less common partly for this reason).

Other possible constraints: If you benefited from a “principal residence” exemption on a previous sale by declaring this property your new main home, you should actually move in – otherwise you risk that exemption being invalid. Also, if you received a French government subsidy or zero-interest loan as a resident buyer, those often require you not to sell or rent within a certain period or else repay benefits.

In normal cases for foreign buyers, none of these special cases apply, so you can resell at will. Just coordinate with your bank to pay off the mortgage at closing (the notary will handle paying the bank from the sale proceeds). The buyer of your property does not “assume” your loan; they will get their own. Make sure any penalty for early payoff is understood – often it’s limited by law.

In summary, France imposes no resale restrictions. You have full ownership rights to dispose of the property as you see fit. Consider the market conditions and transactional costs, but legally you have freedom to sell.

Moving to the Country

Does owning property help residency? Simply buying property in France does not grant residency or a visa. France doesn’t have a direct “golden visa” for property like some countries. So if your goal is to move to France, you’ll need to qualify through the standard immigration pathways (work visa, long-stay visitor visa, family reunion, etc.), irrespective of owning a French home. Buying a property in France does not grant you automatic residency rights.

That said, owning a home can indirectly support your move. For instance, if you apply for a long-stay visa (like a visitor visa or “retiree” visa), showing that you have accommodation (your own property) can strengthen your application. It demonstrates you won’t be a burden for housing. France recently considered an easier visa for second-home owners (especially for UK Brits post-Brexit), but as of 2025 that “automatic visa” proposal has been shelved or not passed into law (Automatic visa for easy second-home visits passed by French ...).

If you do move and become a French resident: Having an existing French property and mortgage might actually simplify some things. You’d update the bank with your local income status, potentially renegotiate the loan on better terms as a resident. You’d also start paying resident taxes (and could claim any primary-home exemptions, etc.). Notably, once you’re a tax resident using the property as your principal home, it becomes exempt from capital gains tax after you live in it, even if you sell in under 5 years.

Becoming a resident with a mortgage: There’s no rule that you must refinance or change anything about the loan when you move. The loan terms remain the same. You should ensure you get appropriate insurance – for example, once you join French social security, you might update your life insurance policy info. If you were non-resident and had a non-Euro income, and now you earn in euros locally, you’ve eliminated the currency risk on your loan.

In summary, owning property is independent of residency status. Plan your visa separately – property ownership is a bonus feature but not a free pass to live in France. If long-term relocation is your plan, consult immigration experts on the best visa, and enjoy the benefit that you already have a place to stay once you secure your residency permit.

Changes to Laws

Keep an eye on law changes: France’s real estate and mortgage regulations do evolve. For example, in 2022, the French High Council for Financial Stability made binding a rule that limits residential mortgage loans to a maximum 25-year term and a 35% debt-to-income ratio (Mortgages: new rules soon to be mandatory - Anytime). This kind of change can affect how much you can borrow. Interest rate environments also shift due to policies like the usury rate – when rates spiked in 2023, there were temporary adjustments to how the usury rate was calculated (monthly revisions) to avoid choking off credit.

Recent major changes: In 2018, France replaced the wealth tax (ISF) with a real-estate-specific wealth tax (IFI), changing how property ownership is taxed (now only real estate counts, and loans on that real estate are deductible. Tax rates and thresholds can change with budgets – for instance, the surtax on high capital gains or the social charge rates on rental income have seen adjustments. Always verify the current tax rules when you are preparing to buy or sell.

On mortgages, consumer protection has increased: lenders must provide a standardized document (FISE) with all terms, and you have the 10-day cooling-off to accept an offer. The market is also influenced by EU-wide rules (like creditworthiness assessments, currency risk disclosures, etc. under the EU Mortgage Credit Directive).

Political climate: France periodically debates measures affecting foreign owners or luxury real estate. In recent years, there have been discussions on tightening rules for furnished tourist rentals (Airbnb) in big cities, which could indirectly affect owners’ rental strategy. Also, local governments have some power – e.g., Paris raised the annual taxe on second homes by applying a surcharge to encourage owners to rent them out long-term.

Golden visa? Unlike some EU nations, France never had a true “golden visa” for property, so nothing to worry about there. But note, post-Brexit, British buyers are treated as non-EU – which mainly affects their ability to stay in France without a visa, not their property rights.

In short, stay informed: laws can change in terms of lending criteria, taxation, and rental regulations. It’s advisable to consult with your notaire or fiscal adviser each time you make a major decision (purchase, rental, sale) to ensure you’re up to date. France’s legal system is quite stable and protective once you’ve purchased, but being aware of changes (like the 35% DTI cap or new taxes) will help you adapt and make the most of your investment in France.

Using Financing from a Home Country Bank

Can I use a foreign (home country) loan? In practice, French properties are normally mortgaged by French or European banks. A bank in your home country cannot easily secure a legal charge on French real estate (Can I Get A UK Mortgage For A French Property? - France Tax Law). French law requires mortgages to be registered in France through a notary. Most foreign banks aren’t set up for that. So you won’t find, say, a standard U.S. or UK mortgage that directly uses the French home as collateral – those lenders lack jurisdiction in France.

Alternatives: This doesn’t stop you from tapping home-country financing in other ways. Common strategies: (1) Take an equity release or second mortgage on your home country residence, and use those funds in France. Essentially, you become a cash buyer in France (no French mortgage), and you repay the loan back home. (2) Get an unsecured loan or private loan from your home bank (if the amount is not too large). Both approaches avoid dealing with French banks, but you must manage currency exchange if applicable.

Cross-border banks: Some international banks with presence in Europe might consider lending to you secured by assets in another country, but typically they still prefer securing against the French property. Unless you are a high-net-worth client (Private Banking level), it’s rare to negotiate a foreign security arrangement. We sometimes arrange multi-jurisdiction financing, but usually it’s for very large loans and involves pledging other assets rather than the French home.

If you do finance outside: Remember that if you don’t have a French mortgage, you won’t benefit from the French deductions (like wealth tax reduction or rental interest deduction) – although if your foreign loan is secured by French property, French tax might still view interest as deductible (complex case-by-case). But typically if you just bring cash to France from a foreign refinance, French tax sees no loan on the property. 

Bottom line: Plan on either using a French lender or using your own funds. A home-country bank cannot directly hold a lien in France, so any foreign financing will be effectively unsecured as far as the French property is concerned. The French notary will treat you as a cash buyer. There’s nothing wrong with that – it simplifies the purchase steps (fewer notary acts) – but you’ll be personally liable to pay your foreign loan. Also consider currency risk if your foreign loan is in a different currency than the euro value of your property.

In most cases, only French-registered mortgages count in France. Many buyers from abroad either go through French banks or leverage assets back home to buy in cash. Always weigh interest rates and risks – sometimes arranging finance at home can be cheaper or easier than a French mortgage, so it’s worth comparing.

Revaluation of the Property

Does the bank revalue the property over time? In general, no. Once your mortgage is granted, French banks do not periodically re-appraise your property for loan-to-value adjustments. The loan terms (rate, balance, payment) remain as initially agreed regardless of market fluctuations. There’s no concept of margin calls on a standard French mortgage – it’s not like a stock margin account. As long as you keep paying, the original valuation stands on the bank’s books.

If property value rises: Congratulations, you have more equity. The bank won’t automatically offer you more money or discuss a refinance or equity release. In France, withdrawing equity isn’t as common as in some countries, but it’s possible by either: (1) refinancing the mortgage for a larger amount (essentially a new loan, perhaps with a second-rank mortgage if you keep the first), or (2) taking out a separate equity loan (like a mortgage top-up). Expect the same credit process as any loan – increased value alone doesn’t guarantee approval, your income must support a larger loan. French lenders are conservative on “cash-out” refinancing – some may only allow it if funds go into renovations or another property purchase. Statistics show it’s “almost impossible to release equity from a French property once you have bought it” via further borrowing, so rising value is more likely to benefit you at sale rather than through refinancing unless there is plenty of equity and the loan is large enough for a private bank.

If property value falls: There is no immediate effect on your mortgage. France does not have a mechanism where the bank can demand partial repayment due to a drop in value (no mark-to-market of your house). The loan stays the same. Only if you tried to refinance or sell at a price insufficient to cover the mortgage would the appraised value matter. After events like 2008, banks simply carried on with mortgages as long as payments were made – they do not foreclose just because of negative equity absent payment default. Some private banks may ask for further collateral if the price of the property falls to far.

Regular updates: The only regular “revaluation” you might see is for property tax purposes – the government may update the cadastral value periodically, which can affect your Taxe Foncière. But that has no effect on the mortgage.

In summary, property revaluation isn’t part of French mortgage maintenance. Your loan is based on the initial valuation unless you have borrowed 100% of the property value from a Private bank. If you want to tap increased value, you’d initiate that with the bank or a new lender (and pay new notary fees for raising the mortgage amount). If the value drops, the bank’s risk increases on paper but they won’t act on that unless accompanied by missed payments unless in the case mentioned above. This stability is one reason French mortgages are considered safe for borrowers – once you lock it in, the property value swings are mostly your concern, not something that triggers loan changes.