A mortgage in the form of a bridging loan is called a “ prêt relais “ in French.

It is a mortgage facility for those purchasing a property who have yet to complete the sale of their existing property.

The borrower generally only pays the interest element of the loan, with the capital being paid off on sale of their present property.

It is not unusual for French lenders to convert a prêt relais into a long term mortgage loan.

Before applying, it’s important to have an Estate Agent provide a conservative valuation of the resale value for your French property.

There are also transaction costs to plan for when considering if your current property value is high enough for the project to make sense.

By taking on an Equity Release mortgage in France, you will also have to pay mortgage registration tax (“hypothèque”) which varies depending on the loan amount.

In all cases, a French Notaire must change the charge registered on the title of your property from the old bank to the new bank, the cost of this tends to be about 1.5% of the new loan amount.

French banks will typically charge up to 2% - 3% as a fee to set up the loan.

ICE Finance charges a fee as specialists which will be payable on acceptance of your mortgage offer.

Normally only up to 60% of value of present home being sold can be used in this way, although it may be higher if the lender considers the risk a manageable one.

The borrower generally only pays the interest element of the loan, with the capital being paid off on sale of the present property.

Therefore these loans will be on a short-term fixed rate agreed at the outset and fixed for the entire credit loan term.

Credit loan is a monthly loan structure, rolling over on a month-by-month basis, for a maximum period of 24 months.

Interest rate is typically a short-term dated fixed rate for up to 24 months.

Guaranteed by EuroZone Money Market Bonds or by other International Money Markets if the property to be sold is in a non-EuroZone territory, like the United Kingdom.

As of April 2022, typical fixed interest rate is 2.60% p/a

Following the changes in the mortgage application process of certain EU countries, obtaining a mortgage in France is no longer harder to do than in neighbouring countries such as the UK.

Of course, the French are still very protective over the financial markets, including those relating to French second home mortgages products but in many ways this is why it is possible to source such favourable rates over such long periods.

This security means however that non-status lending and self-certification mortgages are not available.

Each of the French banks has a slightly different underwriting criteria and so requires a slightly different set of supporting documents.

Some banks may also require documents to be certified by a finance or legal professional – we will advise accordingly based upon your own personal circumstances and French property project.

For a Bridging-loan style mortgage product, it will be paramount to independently assess the current market value of your property and also for the ownership of your property to be within a SPV-type Real-Estate Holding Company.

Enquire within for further information.