This will ensure that the buyer is best positioned to obtain a tax deduction for the interest borrowed against any rental income.

French banks typically lend 70% of the purchase price (although 80% can be arranged in certain circumstances). You can expect to pay a mortgage registration charge of 1% and another 1% arrangement fee.

In the case of a new property development a staged loan drawdown can be arranged usually with minimal repayments until the loan is fully drawn down.

Mortgage protection insurance will be required and is normally arranged through the bank.

If you intend borrowing to finance your investment it is important that this is disclosed when you sign the preliminary purchase agreement (Compromis de Vente)

You will need to make a decision on whether to borrow on a fixed or variable rate basis.

The Eurozone’s base interest rate has fallen to an historic low of 2% in recent months, following American interest rates which have fallen to 50-year lows. However these low rates cannot last indefinitely, as the threat of inflation around the globe is likely to lead to interest rate rises in 2005.

A good indication of future mortgage interest rates (base rate plus margin) is the fixed rate quoted today:

Ultimately the decision to fix your borrowing rate will depend on your risk appetite. Since it started setting our base interest rate, the ECB has never raised it above 4.75%, but would you sleep easier in your bed at night if your repayments were fixed, particularly if your rentals are also guaranteed?

Oui Can Do works with a number of partner banks in France to get you the best possible financing deal. We can look at a variety of financing options to suit your cashflow requirements.

We will talk your through your financing options – including a fast track “in principle” loan approval.