France, Known For Simple Mortgage Loans

France has simple mortgage loans, lower interest rates and easier terms of repayment:

In France, home loans, or hypothèque, are offered by all major banks for both residents and non-residents. Several foreign banks too are in the business. Apart from these entities, the French post office also offers mortgages with a rider that an applicant must be member of a contributory plan for a minimum of 18 months. Loan are offered in foreign currencies except in euros.

French bank Credit Agricole is the largest player in the home finance market with a 25% share of the market. BNP Paribas group bank UCB specializes in arranging mortgages for foreign buyers in collaboration with a building society named the Abbey Building Society.

France has witnessed a sort of repayment issues in the recent past and banks are making the criteria for lending to home buyers stricter these days. Some foreign banks have stricter rules than French banks in terms of employment, earning, the type of property to be bought, etc. It can be particularly difficult for a single woman to obtain a mortgage in France.

REPAYMENT MODES

In France, the repayment of home loans is through what is described as the ‘capital and interest’ method, which essentially is repayment through monthly instalments of capital and interest. During the loan term, the balance of capital owed reduces to nil. Some banks do offer ‘interest-only’ mortgages. The maximum mortgage term is 30 years, but in most cases, it will be 15-25 years. Most of the banks insist on a life assurance policy for borrower, which is assigned to the banks.