Bricks And Mortgages

Are you planning to buy a home in France this year? Fiona Watts explains why it’s a good time to consider financing your purchase with a French mortgage

- Fiona Watts

For those of you looking into the financing of a French property purchase in 2018, there are a number of reasons why a French mortgage may be the best option available to you. Mortgage rates in France are near their record lows, meaning that banks are pricing credit at attractively cheap levels. As always with financial matters, however, there are a number of different factors to bear in mind when choosing your mortgage product.

UK AND FRENCH ECONOMY

On 2 November, the Bank of England announced the first UK interest rate rise in 10 years. The official bank rate was increased from 0.25% to 0.50%, a significant landmark in the continued recovery of the UK economy following the global recession of 2008.

The expectation is that the European Central Bank (ECB) is soon to follow suit. The rate hike in the UK is just the latest of a number of factors that are combining to suggest that interest rates in Europe will soon be on the rise. Another of those was Emmanuel Macron’s appointment as France’s new president back in May 2017. The young president has made it clear that his priority is the health of the French economy, which remains Europe’s third largest in terms of GDP. This has reassured financial markets, and has served to remove the uncertainty that had been building towards the end of François Hollande’s regime.

With the eurozone economy on the up, speculation is mounting as to when the ECB will reduce its quantitative easing programme and start raising interest rates. This is the key question right now for anyone looking to take out a French mortgage, and it is one that has led to some noteworthy developments within the lending departments of French banks.