After years of elevated interest rates that cooled the French property market, 2025 is emerging as a remarkable opportunity for non-resident international buyers considering property in France. With mortgage rates declining significantly from their highs in 2024 and market conditions stabilizing, taking out a French mortgage as a foreign buyer has never been more attractive. Here’s why financing your French property purchase through a local mortgage could be your smartest financial move as an international investor.

Mortgage Rates and Conditions for Non-Resident Buyers

While French mortgage rates have declined significantly across the board, non-resident buyers should understand the specific conditions that apply to their situation. Current mortgage rates in May 2025 stand at approximately 3.20% for 25-year loans.

However, non-resident buyers may face slightly different conditions:

• Higher deposits required: While French residents can sometimes borrow up to 90-100% of property value, non-residents typically need 25% deposits,
• Income verification requirements: Banks pay extra attention to verifying complete financial profiles for overseas buyers
• Currency considerations: All French mortgages are denominated in Euros and secured against French residential property

Despite these additional requirements, the fundamental rate structure remains highly competitive for international buyers, especially when compared to mortgage rates in the US which currently stand at 6-7%.

Strategic Financial Benefits for International Buyers

Wealth Tax Optimization

For high-net-worth individuals, French mortgages offer sophisticated tax planning opportunities. The French Wealth Tax (IFI) applies to real estate equity exceeding €1.3 million. By taking out a mortgage, you can strategically reduce your taxable real estate equity, potentially keeping your wealth below IFI thresholds or significantly reducing your tax liability.

For properties valued above €1.3 million, the wealth tax savings can effectively reduce your mortgage interest costs, making borrowing more attractive than paying cash.

Currency and Risk Diversification

Taking out a Euro-denominated mortgage provides natural currency hedging for your French property investment. This is particularly beneficial for buyers whose home currencies have weakened against the Euro or who want to diversify their borrowing across different currencies and jurisdictions.

Leverage for Portfolio Diversification

Rather than concentrating significant capital in one French property purchase, a French mortgage allows non-resident buyers to maintain liquidity for investments. With current French mortgage rates for non-residents around 4%, these rates are actually lower than what many Americans can earn in high-yield savings accounts or treasury funds.  This makes the opportunity cost of using cash versus financing strongly favor the mortgage route, especially for investors looking to diversify across multiple markets, currencies and investments.

Enhanced Tax Benefits for Rental Properties

For non-resident buyers planning to rent their French property, taking out a mortgage can provide significant tax savings. Under France’s “Régime Réel” (Actual Expense) system, property owners can deduct mortgage interest against their rental income, along with other legitimate expenses such as property management fees, insurance, repairs, and property taxes. This regime is particularly advantageous when actual expenses, including mortgage interest, exceed the flat-rate deduction offered under the “Micro-BIC” regime (which provides a 50% deduction but caps rental income eligibility at €70,000 annually). For investment properties with substantial mortgages, the interest deduction can dramatically reduce taxable rental income, sometimes creating tax-efficient or even tax-neutral cash flow scenarios.

Favorable Market Timing in 2025 and Economic Factors Supporting Lower Rates 

Several economic factors are contributing to the current attractive mortgage environment for international buyers:

• The European Central Bank’s key interest rate cuts are leading to lower real estate loan rates to stimulate the market 
• Controlled inflation, dropping to 1.3% year-over-year in May 2025
• Banking competition, with banks eager to meet lending targets and offering attractive rates for strong borrower profiles

The Mortgage Application Process for International Buyers

Documentation and Requirements for Non-Resident Buyers

French banks have additional requirements for non-resident buyers due to the complexity of verifying overseas income and credit history. All non-resident applicants must provide comprehensive documentation including: 

• Recent Credit report from a US Credit Bureau
• At least three years of audited financial statements for self-employed buyers
• Proof of stable income and recent bank statements for employed buyers
• Evidence of assets and financial stability in their home country
• In some cases, lenders may require deposits of substantial sums (such as two years’ worth of mortgage payments) into French savings accounts as collateral

Non-resident buyers with French citizenship or strong ties to France (such as local employment contracts), or existing relationships with French banks may be able to receive more favorable terms.

 Timeline and Professional Support

Sourcing a French mortgage typically takes between 6 to 8 weeks due to various legal processes. Working with experienced professionals like Amaury de Monclin of Bluesky finance ensures you navigate this process efficiently and secure the best possible terms.

Associated Costs

While there are costs associated with taking out a French mortgage, including valuation fees, mortgage origination fees (typically 0.5% to 1% of the loan amount), and notary fees, these are often offset by the benefits of leveraging rather than using cash.

Expert Predictions for the Near Future

Financial experts remain optimistic about the mortgage market’s trajectory. Some analysts predict that the average mortgage rate could drop by the end of 2025, depending on economic stability.

Despite some market volatility, the European Central Bank’s accommodative policy continues to support access to credit, with further rate cuts anticipated. 

“Given the current monetary policy landscape, the cost of borrowing in euros stands significantly below the yield available on low-risk USD investments. This unusual dynamic makes now an exceptionally advantageous time to raise capital in euros for French real estate assets,” says Amaury de Monclin, Principal at Bluesky Finance.

The Bottom Line and Final Thoughts

With mortgage rates at their most attractive levels in over a year and market conditions favoring buyers, 2025 presents an exceptional opportunity for non-resident international buyers to finance their French property purchase through a local mortgage. The combination of:

• Historically competitive interest rates for international buyers
• Long-term fixed-rate stability unavailable in many other markets
• Strategic tax advantages for high-net-worth individuals
• Currency diversification benefits

makes French mortgage financing a compelling choice for non-resident property buyers.

“Many of our clients do not actually need a mortgage but choose to get a mortgage in France to avoid the wealth tax, to free up capital for other investments, or to avoid having to sell securities in the US and pay high capital gains tax,” explains Pamela Goldman, Strategic Director and Client Services Manager at Paris Property Group. “A French mortgage can be a strategic financial tool rather than a necessity.”

Contact Paris Property Group to learn more about buying or selling property in Paris or to be introduced to a trusted mortgage professional.