The year is ending with incredibly stable interest rates in France and in the eurozone in general. This stability can be explained by two factors, explains Céline Vigier-Flechou of ICE Finance, who work as independent partners with Leggett Immobilier. “A return to inflation slower than planned (the inflation rate and the anticipated rate of growth are the principle components of a normal rate); plus a very accommodating politic from the Central Bank. According to Mr Draghi [President of the European Central Bank], this politic should continue into 2018 with a gradually lowering before coming back to a normal situation in 2019-2020.”
Céline adds that the rate should remain low and as the economical situation is getting better in Europe and most particularly in France. This situation will then raise the demand for mortgages. “All this bodes very well for 2018, as far as the property market is concerned.” And remember that current mortgage deals can mitigate the unfavourable exchange rate, by allowing you to lock into a 10-year fixed rate, for 1.70%, for example. You can also put down a minimal deposit to reduce the amount you are transferring over right now. But if the price of your home goes up by, for example 2 per cent in a year, you are recouping the loss on the rate. Of course, depending on early-repayment penalties, you could also pay off a lump (or all of it) when the exchange rate improves.