Record low mortgage rates counter weak pound

Whilst the drop in pound against the euro in the past month has undoubtedly been bad news, savvy property hunters can remove the sting of the currency loss by taking a loan – and one at an historically low rate.

Last month fixed-rate French mortgages dropped to less than 2 per cent – with loans available from as little as 1.70 per cent with 80 per cent LTV on a 20-year term. Financial experts have crunched some numbers and calculated that the drop in payments on a loan throughout its term (from 2.7 per cent last year to 1.7 per cent now) more than compensates for the drop in sterling value. The lower the deposit, the less your exposure to the exchange rate too – why not wait til the rate improves then pay off your loan then? In the meantime you can earn some local income.

Trevor Leggett, Chairman of Leggett immobilier, comments: “With the pound bouncing up and down like a yo-yo, a huge number of our clients are now taking advantage of the ridiculously low borrowing rate. If you are looking for an investment then property in Paris, the Alps or PACA can easily provide a 3-4 % yield, with 7-8 % yield available in some provincial towns. We’re seeing an unprecedented opportunity – even clients looking for a holiday home are piling in. Prices hit rock bottom 12 months ago and are only going one way for the foreseeable future.”