The new loan amount must not exceed 70% of the value of your French property with a minimum loan amount of 100,000 euros.

To qualify for cash out when refinancing, you must have an approved purpose or declared project for the cash.

For example :

• purchase of residential real estate
• renovation
• repayment of money used for completed renovation to savings
• purchase of car, boat, plane, works of art
• financing children's education
• investing in pension plan, mutual fund, bonds

Here are some examples of projects are NOT approved :

• repayment of existing debts
• purchase of commercial real estate
• commercial use such as working capital for a business
• purely speculative investments

You will be obliged to show proof of the destination of the cash out such as :

• signed purchase contract for real estate
• signed application for fund investment
• letter specifying the cost of school tuition for your child
• quote for purchase of boat

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.

• Prepayment penalty on your existing loan - check your loan offer to see if this applies, the maximum any French bank can charge is six months interest on the amount repaid, not to exceed 3% of the oustanding capital.
• 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 = 210,000€

Prepayment penalty on your existing French mortgage = 5000€

Notary costs = 4725€

Bank and broker transaction costs = 4725€

Total to refinance =224,450€

Maximum cash out allowed = 90,550€

Total to refinance + cash out / Value of French property = 70%

Please note that you will be required to provide a complete mortgage application and must financially qualify for the mortgage. The French bank will analyse your debt to revenue ratio, your net assets and your monthly disposable income when considering your request.