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29 June 2010

Conti offers 1.95% euro mortgage on French properties

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by Gill Montia

Conti offers 1.95% euro mortgage on French properties

Overseas mortgage specialist, Conti, is offering one of its lowest rates ever for properties in France, at 1.95%.

According to the firm, France has always been a safe haven for overseas buyers because of its relatively stable property market and relatively secure situation.

As a result, there is a strong appetite for lending to foreign investors, in some cases up to 100% of the value of the property.

Conti operations director, Clare Nessling, says: “The country has become an increasingly attractive investment option, not least … due to the falling value of the euro, and lower property prices, with many sellers dropping their prices to levels we’ve not seen for several years.”

Euro mortgages available for homes in France through Conti include a variable-rate loan at 1.95% for 80% loan to value (LTV); a five-year fix at 3.15% at 80% LTV; a two-year fix at 3.50% at 100% LTV, minimum loan value of €300,000, and minimum earnings (single or joint) of €90,000.

Earlier this year, Conti reported that an increasing number of clients were opting for euro mortgages in the expectation of making large savings as sterling recovers against the euro.

For example, an UK investor who took out a euro mortgage of €250,000 in February based on the exchange rate at that time of around €1.1 per £1, made a commitment of around £227,000 to pay off the mortgage.

However, the exchange rate has since improved to around €1.2 per £1 reducing the total cost of the loan by £18,000.

If, over the next year or two, the exchange rate increases to €1.3 per £1, investors would only have to find around £192,000 to repay the mortgage, reducing the cost by £35,000 in sterling terms.

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