French Mortgages - French fixed rates to achieve new historic lows?

Originally posted on October 30th 2014

A 20 year fixed rate mortgage in France hit 3.10% and 25 year fixes for 80% of the purchase price were available from 3.50% for non-resident buyers last week as the TEC 10 index tumbled to a new all-time low of 1.22%. These are now officially the lowest rates we have seen for French mortgages this century or last.

These record low rates have mainly been driven by the crashing of long term government bond yields across Europe. 10 year bond government bond yields are now also at historic all-time lows. Investors are now lending to the German government at 1% for 10 years and perhaps feeling like they got a good deal.

Of course it is all relative to the risk one has in the market but it is going to take some serious work by European Governments and Mario Draghi to raise sentiment for growth, though it is nothing a good dose of QE wont help to sort out. In the meantime those looking to buy French property can lock in incredible value at these current rates and so can European governments looking to refinance their debt pile.

French Mortgage Best Buys

Rate    Duration    LTV    Description
2.10%    20 years    80%    Tracker mortgage 3m euribor +2%
2.20%    25 years    80%    Tracker mortgage 3m euribor +2.1%
3.05%    25 years    85%    Rate capped + 1.5% for 10 years
3.10%    20 years    80%    Rate fixed for the term
3.30%    25 years    80%    Rate fixed for the term
3.90%    25 years    85%    Rate fixed for the term

Interest Only
2.40%    15 years    70%    Tracker +2.05%
2.95%    14 years    75%    Tracker 3 month Euribor +2.85%
3.90%    15 years    70%    Fixed rate


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