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Languedoc property guide |
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Typical French mortgage terms |
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Mortgage information index : |
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Credit Agricole is the largest bank in France, and provides the majority of mortgages for house purchase. These notes were provided by their local English speaking international banking arm, CA-KeyFinance, at our request.
CA-KeyFinance Mortgage terms
Fixed Rate vs Variable Rate : |
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Fixed rate |
This is the option the most secure, as your interest rate and monthly payments are known in advance. C/A KeyFinance can offer you a fix rate that is flexible, which allows you to reduce your monthly payments between 10 to 20% each year. You can equally decrease the monthly payments, although this reduction must not lengthen the life of the mortgage by more than two years. In the case of early repayment you will be liable to redemption charges of 3% of the outstanding balance of the loan, or 6 months interest. This is what we call « l’IRA »(indeminités de remboursement anticipé).
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Variable Rate |
The rate is fixed for the first year. The variable rate for the following years is based on the EURIBOR. The rate is reviewed at each anniversary. To secure your loan with C/A KeyFinance, we propose Variable Capped rates of 1%, 2% and 3%. If you opt for the capped rates of 1% or 2% , then with early repayment of the mortgage, you will have to pay redemption charges of 3% of the outstanding balance of the loan, or 6 months interest. The Capped rate of 3% has no early redemption charges if you wish to repay the mortgage early.
!! The variable capped 3% rate mortgage is flexible. In both cases, partial and full repayments can be made during the life of the loan. You can increase the monthly repayments by 30% each year. You can equally decrease the monthly payments, on condition that the reduction does not lengthen the life of the mortgage by more than two years.
You have the option of converting to a fixed rate mortgage at each anniversary. |
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Charges for mortgage security (Frais de garantie) : |
All C/A Keyfinance mortgages, are secured with a charge on the property.
Two types :
First charge on property "PPD – Privilège de Prêteur de Deniers" :
If you buy an old or a new existing property involving the transfer of ownership, the security associated with this loan is called a first charge on the property.
Contractual mortgage "HYPOTHEQUE":
However, if there is no transfer of ownership - as in the case of refinancing an existing loan or requesting an equity release - or you are purchasing a property under construction, the security is a contractual mortgage ("Hypothèque Conventionnelle").
The registration of the mortgage and the PPD is paid to the notary.
These charges for securing mortgages are based on the amount borrowed.
Notary fees are legally established by the Chamber of Notaries and are usually non-negotiable. Please contact your notary for additional information and the costs of securing mortgages. |
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Terms & Conditions |
Purpose and amount of the loan |
Purchase, renovation, construction, leasebacks.
Contribution required as down payment : 20% of the purchase price |
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Borrowers are required to take out |
- Mortgage protection with C/A KeyFinance
- Building insurance with CREDIT AGRICOLE |
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Term |
up to 30 years |
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Income criteria |
Your total monthly mortgage and credit commitments (including the new mortgage) should not exceed 1/3rd of your net monthly income. |
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Type of mortgage (guarantee) |
A capital and interest straight repayment mortgage secured on a French property requires “frais d’hypothèque” (a mortgage registration fee) which is payable to the “Notaire” (Notary).
(estimated as part of the offer of mortgage) |
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Repayments |
Monthly repayments are debited automatically from your bank account.
There is no penalty for the early repayment of variable rate capped rate 3%
There is a penalty of 3% on the remaining capital, for early repayments of fixed rate mortgages and variable rate capped rate 1 and 2% |
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