Equity Release on Your French Property

Equity Release is a term commonly used to indicate the release of capital from a real estate property. 

In France you can release up to 70% of the value of your French property in cash to use for other projects, with a minimum loan amount of 300,000 euros.  Many banks require an annual household income of 50,000 euros or more to qualify. Please note that we are not able to offer equity release for leaesback properties.

  • Equity Release in France is not the same product as in the UK. The French product allows you to release funds from your French property that you will then pay back with monthly payments. It is not possible in France for non residents to have a mortgage without monthly repayments until your death or the sale of your home, like in the UK.
  • If there is a French mortgage outstanding on the property, it must be re-financed at the same time as the equity release so that the new French lender has first claim against your property. See Remortgage with Cash Out.

To qualify for a French Equity Release mortgage, you must have a coherent declared project for the cash, for example :
• purchase of residential real estate outside of France
• renovation, interior furnishings
• repayment of money used for completed renovation to savings
• purchase of car, boat, plane, works of art
• financing children's education

Here are some examples of projects are NOT approved :
• repayment of existing debts
• purchase of commercial real estate
• investing in pension plan, mutual fund, bonds
• commercial use such as working capital for a business
• purely speculative investments

You will be obliged to sign a declaration to confirm the intended use of the funds.

Before applying, it's important to have an estate agent provide a conservative valuation of the resale value for your French property. French banks require this before considering your application.

There are also transaction costs to plan for when considering if your current property value is high enough for the project to make sense.
Notary costs - in most 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.
Bank and broker fees - this will depend on your specific project and the bank chosen, plan on 1.5% of the new loan amount for estimation purposes.

Example
Value of your French property = 450,000 €
Outstanding balance on your existing French mortgage = 0€
Maximum loan allowed = 315,000€ (70% of 450,000€)
Notary costs = 4725€
Bank and broker transaction costs = 4725€
Maximum cash out allowed = 305,550€

The French lender will be require a complete mortgage application. You must financially qualify for the mortgage in terms of your debt to revenue ratio, your net assets and your monthly disposable income.

Why Equity Release and not simply a personal loan?
It makes financial sense to release equity on your property, rather than take out a personal loan, as the interest rate on a French mortgage will be far lower than that charged on an unsecured personal loan.

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Testimonials

David, South of France, Equity release on home in France

"...The process was simple, effective, and quick... France Home Finance have proven to be outstanding in their service and flexibility... they even negotiated a rate reduction after the bank had made an offer at a higher rate. Now that's incredible!"

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Resources

Best French Mortgage Rates

Find the best interest rates available on the market for your French mortgage here:

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French Interest Rate Indices

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Case Studies

Equity release to renovate your French Home

The Reynolds decided to refinance their 250 year-old farmhouse to recover cash they had invested in renovations.

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