Proposing the lowest variable rate on the market starting  at 2.80% with 80% Loan to value  or a 3.25% variable rate with 85% Loan to value, the offers seem to be indeed more and more interesting for 2012.

By not respecting the market’s trends, some fixed rates have slightly increased ( of 0.20%). These rates  mainly concern the Capped and Interest only products. . As long as fixed rates at 3.75% for over 10 years and 4% for over 15 years for capital repayment mortgage remain the lowest, there is no reason to be concerned of.

Moreover, statistics do not predict any significant increase. The best thing while in need of a  mortgage for a French property purchase is to speak to a Sextant’s specialist broker who can discuss the market outlook for you and the best options available   for you.

All new rates can be found on our French mortgage website under the heading “Best buy deals and rates“.

Do not hesitate to complete our questionnaire: get a French mortgage quote, to receive a free quote with no obligations.

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Rates reductions concern mainly Capped and Variable rates because they follow short term rates such as the Euribor 3 months index, That is why they have been adjusted accordingly.

For instance, a significant opportunity is offered on a variable capital repayment mortgage over 20 years with an LTV of 85%. It now starts at 3.25% instead of 3.55%.

Also relevant for capped repayment mortgage over 20 years the rate reduced from 3.95% to 3.65% still with an 85% LTV.

These promotional rates are applicable until 5th April for mortgage files received by the French bank and 23rd April for offers issued.

You will find all new rates updated on our French mortgage website under the heading “Best buy deals and rates“.

If you would like to receive a free quote with no obligation then do not hesitate to fill our questionnaire: get a French mortgage quote.

	What next? Call +44 (0)1494 725353 (Open 8:30am – 6pm (UK Time) > Open a Currency account today > Request a call back > Ask questions about Currency Exchange

Foreign Currency Direct plc (FCD) are Sextant Properties preferred currency partner and have been selected due to their award winning exchange rates having topped the exchange rate tables in The Sunday Times for three consecutive years. FCD also offer a number of different contract options for Sextant clients including a forward contract where you can fix a rate of exchange for a period in the future using just a small deposit, perfect to help take the risk out of the currency markets and budget for your French property purchase.

If you would like to discuss your currency requirements and all the options open to you including the forward contracts please contact our preferred currency partners Foreign Currency Direct plc on 01494 725353 or visit their website: www.currencies.co.uk

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In order to avoid any unpleasant surprises, here are ten points that should not be overlooked before submitting your application to a bank or a credit broker.

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1/ The amount of personal contribution

There is no miracle. Banks, which in the past were able to finance 100 or 110% of a real estate project, are now very strict when it comes to the financial contribution of the borrower.

Anyone wishing to obtain a mortgage has to have at least 10% of the amount borrowed. Most banks say that the contribution has to cover various costs, such as the cost of constituting and maintaining bank guarantees, notary fees etc.

Depending on the institution and the profile of the borrower, this rate can vary and some banks require at least  a personal contribution of 20%. “This may seem like stating the obvious, but the higher the personal contribution, the more likely it is that the bank will lend to you”. Sometimes just a few hundred Euros are sufficient”.

2/ Stability of employment

More than ever, banks fear instability and a favourite motto is “above all, stability of employment”. Indeed, the key access to credit  now relies on you having a  permanent contract and being of a certain age . For the liberal professions and the arts, the previous  two or three years of their company’s accounts and balance sheets should be provided.

3/ No to the overdraft!

Before granting credit terms, the financial situation of the borrower is carefully studied by the bank. You should of course pay off all personal loans, car loans & credit card balances as soon as you can. And if you cannot repay them in full, try to group them together.

 As a matter of fact, banks will scrutinise your bank statements for the previous three months, looking for discrepancies. Therefore, make sure you present flawless accounts. A savings account and the capacity to save 300 Euros a month are compulsory if you want to stand a chance.

 4/ Watch your borrowing capacity

This may be the most important rule for the borrower: all your current financial commitments (current main residence mortgage, other mortgages, car loans, loans etc…) cannot exceed one third of your monthly income (salary, rental income, dividends, investments etc…). This is called the Debt Income Ratio. This tool is used to assess financial profiles, which enables us to conclude on the viability of a project.

5/  Make sure you save regularly before you borrow…

At least as much as the income level of the borrower, the bank will also be sensitive with its borrowing capacity.  Banks prefer  lending to a borrower able to save regularly (even if it’s not much!), even if they don’t have a very high income, rather than to someone with a comfortable financial position likely to be overdrawn every month. It may be advisable to delay your request by a few months, to improve your management skills.

6/ …But also after!

Banks are increasingly worried about the savings level of the borrower once credit is granted. The monthly repayment of the mortgage should not be so high that the borrow can no longer save. Keep this in mind when preparing your file.

7/ Do not miss any supporting documents

Submitting a complete file to your  banker or broker is the basics of mortgage applications. If you come up with only half of the documents required, or send your payslips and other account statements one at a time, you will probably annoy your mortgage advisor – and may not be seen in the best light..

Remember to include:

• Last two tax returns ;
• Last three payslips
• Last three bank account statements;
• Copy of passport for all applicants
• Proof of address (utility bill or phone bill …)

8/ Don’t take too long

In the same vein, it’s better not to wait  too long to start looking for funding. Once the sales agreement is received, the buyer of a property has a period of 45 days to justify to the seller that he has obtained his mortgage So don’t waste time!

9/ Be careful where you buy

The more dynamic  the local real estate market where you’ve bought your property, the  higher the chances to eventually sell on your property quickly. You may  not necessarily think of this when you buy, but your bank will pay  particular attention.

10/ Try to bring down the term of the Mortgage

The risk taken by the bank  increases with the term of the loan granted. Therefore, it would be best to reduce the term of the loan as much as possible.  One or two years can  sometimes be sufficient. To give you an example, looking at one hundred cases financed over 25 years, thirty could potentially be over 23 or 22 years only.
This solution is all the more interesting as reducing the number of years could lead to a slight decrease in rates.

By following the evolution of short and long term rates , the investor can anticipate an increase or decrease in mortgage rates. The deadline for consideration in terms of changes in market rates varies by bank, but is still quite short (from 1 to 3 weeks).

It’s not enough to know the variations of the short and long rates to determine the value of mortgage offers. It is therefore essential to remember that other factors have to be taken into consideration, including the marketing of offers, competition, the lender’s cost of fundraising varying with liquidity in the money market and the margin charged to the buyer.

In 2011, the thorny issue of the Eurozone caused many a concern which led to a rise in funding costs and interest rates from banks, followed by a logical increase in mortgage costs for many borrowers.

After a troublesome year, the trend reversed when the European Central Bank shaved another 0.25% off the core Eurozone interest rate, taking the figure to 1%. In November 2011 the Euribor 3 month index was established at 1.58%. As of a few days ago this Euribor had fallen below 1.00% for the first time since 2010, reaching 0.997% – which is also below the official ECB base rate.

The launch of the ECB’s Long Term Refinancing Operation (LTRO) seems to have attenuated the situation. This has allowed Eurozone lenders unlimited access to three year loans provided by the ECB- a very anticipated operation which was a great success and involved 800 banks borrowing over €530 billion.

This saving measure clearly helped resolve the current credit crunch, and will definitely lead to a series of improvements in the entire Euro zone. The first step has already begun, as lenders are now starting to reduce their margins, and therefore, reduce the costs of a mortgage.  People purchasing a property in France will therefore be privy to new opportunities, and the situation will hopefully improve further when the issues surrounding the Euro zone and Greek debt are over. Both parties (lender and borrower) will then become more confident, and competitiveness will increase.

 A very encouraging measure from one of the major French lenders – it cut its interest rates for non-residents by up to 0.4% last week –  concrete proof of the desire for improvement in the current credit situation, and one that gives serious hope for the coming months.

Interest Only (Variable):
* 40 basic point (-0.4%) off the starting rate and margin
* Special 2 years fixed: -20 basic points (-0.2%) off the starting rate
* Special 3 years fixed: -20 basic points (-0.2%) off the starting rate

In order to boost the demand, these low rates will be applicable for a limited time for all new applications sent from February 22nd until April 5th.
Moreover, mortgage offers can be edited using these rates until 23rd April 2012.

After this date, these promotional rates will no longer be available.

What next? Option 1 Click here to enquire and we will get back to you

Option 2 speak to an adviser now
Our home mortgage expert will help you make the right choice.
Call Us Now On: 020 7428 4918

The outlook for the markets remains unclear and as such there is a lot of uncertainty about which way the exchange rates will go. If you need to transfer money to France for a property purchase it is more important than ever to speak to a specialist currency broker who can discuss the market outlook for you and the options available to you. These options include a forward contract where, for a small deposit, you can fix the rate of exchange at the current high levels for a period in the future. So, if you have put a deposit down on a French property and are concerned that over the next few months before the balance is due the rates will change a forward contract is an excellent option as it helps clients budget and takes the uncertainty out of the market. If you would like more information about this and the other contract options available speak to one of the experienced team at Foreign Currency Direct plc.
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	What next? Call +44 (0)1494 725353 (Open 8:30am – 6pm (UK Time) > Open a Currency account today > Request a call back > Ask questions about Currency Exchange

Foreign Currency Direct plc (FCD) are Sextant Properties preferred currency partner and have been selected due to their award winning exchange rates having topped the exchange rate tables in The Sunday Times for three consecutive years. FCD also offer a number of different contract options for Sextant clients including a forward contract where you can fix a rate of exchange for a period in the future using just a small deposit, perfect to help take the risk out of the currency markets and budget for your French property purchase.

If you would like to discuss your currency requirements and all the options open to you including the forward contracts please contact our preferred currency partners Foreign Currency Direct plc on 01494 725353 or visit their website: www.currencies.co.uk

3 of our bank partners have just sent us rates updates this week which reflect the change.

We have updated our Best buy tables for French mortgages, it only shows some of the mortgages available.

If you would like to receive a free quote with no obligation then do not hesitate to fill this questionnaire: get a French mortgage quote

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2.    Money markets history

The OAT 10 years – Fungible Treasury bonds, is a long-term rate government bonds used by banks as a benchmark for fixed rates – After rising considerably in early 2011 to reach its climax of the year, 3.80% in mid April, has fallen sharply since the summer of 2011 to reach 2.45% on September 12, its lowest level since 1996.
It should be remembered that the short rates (Euribor 1 year and Euribor 3 months) serve as a basis for the calculation of variable-rates mortgages.

General speaking, the French Fungible Treasury bond rates trend is positive. After a downfall of 2.50% in summer 2010, it then skyrocketed between late 2010 and early 2011, reaching 3.80% for instance in mid-April 2011. On 6th January 2012 the 10-year OAT is at 3.40%.

3.    Short-term rates (for variable and capped rates)

If you are considering subscribing for a variable rate loan, note that changes in tracker-rate mirror variations in short term Inter Banks loans rates (Euribor)
•    Short term Interest rates in money markets (Euribor 3 months or 1 year) reflect the price at which banks lend money to one another over short periods.
•    These rates serve as the reference for variable rate loans. Banks add a margin of between 0,60 % and 1,50 %, to the short rate term (Euribor 3 Months, Euribor 1 year, sometimes OAT 5 years) ;
•    Then, variable rates vary by predefined periods (1 month, 3 months…), according to a « cap » possibly defined, with the movements of the reference rate.

4.    Long-term rates (for fixed rates)

If you are considering subscribing for a fixed rate loan, note that changes in long term rates allow fixed rates fluctuations forecast.
•    The long term Interest rate (OAT 10-years) reflects the long-term fixed rate to which the French state borrows over a long period (10 years). Banks borrow at a rate slightly higher;
•    This rate is the reference used by banks to set the interest rate applied for 15 years fixed rate mortgages. Rates applied for the other loan terms are calculated by adding or subtracting approximately 0.15% for every 5 year phase above or below a 15 years term.

You might also be interested by our best buy table for French Mortgages

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Hot Current Rates:

Capped Rate : Initial rate 4%+1% cap
• Capped rate for the term of the loan *
• This product gives a double protection to the client as the loan can be extended to a maximum of 5 or 7 years and any outstanding capital due after the extension will automatically be cancelled.
• No penalties for early redemption
*subject to initial term

Variable rate: 3.25%
• Guaranteed security
• Constant monthly repayment
• Possibility of a 5-7 years extension*
*subject to initial term

Fixed 5 years  or 7 years: 3.70%
• Guaranteed security
• Fixed for 5 or 7 years
• Constant monthly repayment
• Possibility of a 5-7 years extension*
*subject to initial term

What next?
If you are going home hunting in France in November or December, you just need to contact one of our mortgage advisers on this number:
+44 (0) 207 428 4918 or by filling this contact form on our website:

Before you travel to France to visit properties make sure you start your mortgage application with Sextant so we can provide you with our in house Agreement in Principle which will increase your negotiating power and will enable you to purchase your dream property at the best possible price.