Buying an Apartment in Paris: The Ins and Outs of Getting a Non-Resident Mortgage in France

An overview of mortgage rules and regulations for foreign property investors

Investing in French real estate has always been an alluring prospect for international buyers. With its picturesque landscapes, vibrant cities, and rich cultural heritage, France offers a compelling mix of lifestyle and financial benefits. But the ever-changing rules and regulations for purchasing property as a foreign investor in France can often be hard to navigate. So, we spoke with our preferred non-resident mortgage specialist to answer many of the questions we frequently get asked about securing financing in France for a property purchase.

Here, we’ll explore the ins and out of getting a non-resident mortgage in France—from eligibility criteria to the intricacies of the loan process for foreigners—to ensure you are well-prepared to navigate the French real estate landscape and make informed investment decisions.

Buying property in France as a foreign investor is an attractive option, thanks to the country’s open market policy and favorable loan conditions. Unlike many countries that impose stringent restrictions on foreign property ownership, France maintains an open market policy. This means non-resident investors can purchase residential properties without facing ownership restrictions or additional stamp duty charges, as seen in countries like the UK, Canada, and Australia.

On top of that, several European banks also actively compete for the business of non-resident buyers interested in investing in the French real estate market. These loans are issued in euros and secured by the property itself. Currently, interest rates are significantly lower in France than in the US and in other markets vying for the attention of international buyers: hovering just over 4% for a 25-year fixed loan for non-EU residents.

Understanding French Mortgages for Foreign Investors

Eligibility and Income Requirements

To qualify for a French mortgage, applicants must demonstrate a sustainable source of income. Acceptable income types include salary or sole proprietor income, investment income, bonus payments, and pensions. French banks typically require a debt-to-income ratio below 33%. Our mortgage partners advise our clients to get pre-qualified before making an offer on a property to have a clear understanding of their borrowing capacity.

Loan-to-Value Ratios and Down Payments

For non-EU or non-UK residents, French banks typically require a minimum down payment of 25% of the appraised value of the property, plus closing costs. For French passport holders or individuals residing in France, the minimum down payment can be reduced to 10%. Making sure the property you are buying is in line with market value is key, since the loan is based on the bank appraiser’s valuation—not exclusively on the agreed purchase price.

As of June 2024, interest rates for US buyers include:

25-year fixed rate at 75% LTV: 4.45%
15-year fixed rate at 75% LTV: 4.20%

Age Restrictions and Term Life Insurance

Unlike in the US, where lenders generally cannot deny a loan based on age, French banks often impose age restrictions. Mortgage loans typically must be repaid by the age of 80. Most French lenders will require their clients to take out a Term Life insurance policy that will pay the loan back to the bank if the borrower passes away. Some banks may allow borrowers to assign an existing life insurance policy to a loan application rather than taking out an entirely new policy.

Mortgage Approval Timeline

It takes less than 72 hours to obtain a mortgage pre-qualification. After the preliminary sale agreement is executed and the mortgage application is complete, it will take about two weeks for the bank to approve the loan. Finalizing the loan, including signatures, legal, and financial checks and required cooling-off periods, can take 5 to 6 weeks more.

A Real Estate Market Primed for Foreign Investment

Investing in French real estate as a foreigner presents a unique opportunity to benefit from the country’s favorable market conditions and attractive loan options. With competitive interest rates, a clear regulatory framework, and accessible financing options, France stands out as a prime destination for property investment.

Understanding the specifics of the French mortgage process—from eligibility requirements to property types and loan conditions—is essential for making informed investment decisions. By securing a mortgage in France, foreign investors can take advantage of lower interest rates and stable market conditions to get the most value out of their property investments.

Whether you’re looking to purchase a charming countryside retreat, a chic city apartment, or a lucrative rental property, France offers a wealth of opportunities for discerning investors. With the right preparation and knowledge, navigating the French mortgage landscape can be a smooth and rewarding experience. PPG’s team, along with our trusted network of financial partners, have helped hundreds of clients navigate the ever-changing rules and regulations of French mortgages.