If you are hoping to take advantage of the low-interest rates in France, beware of a couple of key changes to the term and size of loan that banks can offer; and that the minimum amount that a buyer must put down to get a mortgage has been increasing.
From January 1, 2022, French banks will be subject to new rules aimed at tightening up lending criteria. Among the changes – ordered by the High Council of Financial Stability (HCSF) – banks will no longer be able to grant loans of more than 25 years except in certain specific cases which can go up to 27 years. What’s more, the debt ratio – or LTV – which currently fluctuates between 33% and 35%, will no longer be able to exceed 35%.
But the amount that the borrower must put down to qualify for a mortgage does vary according to the region of France, according to the broker Finance Conseil, who report that the average contribution for the purchase of a property has increased by 13% in 2021, compared to 2020. It is €30,000. However, in Brittany, the increase was more marked: up 40% to €31,000. The biggest deposits were paid in Ile-de-France – €85,985 against €61,633 in 2020, a region that has now overtaken Provence-Alpes-Côte-d’Azur. A decrease was seen in New Aquitaine, down to €24,606; and the same for the Auvergne-Rhône Alpes region, where the average financial contribution to qualify for a loan remains at €50,000. The Hauts-de-France is the region where the contribution required by banks is the lowest, at an average of €22,638.