A French Repayment Mortgage is the most common of the French Mortgage Products and is the easiest to obtain.
It is probably the most familiar mortgage product and it is almost universal outside of the Islamic countries that follow Sharia law using Sukuk.
The mortgage borrower gets the sum they need to purchase a French property then repays the loan by making regular capital repayments and paying interest on the capital sum outstanding. The latest mortgage rates can be found on our French Mortgage Rates page.
Payment Mechanism
Monthly repayments are collected via direct debit (prélèvement automatique) from a French bank account.
You need to nominate the French bank account for your repayments before the bank will release the mortgage funds. You need to supply a RIB (Relevé d’Identité Bancaire ) with the details of your French bank account.
The bank will ask you to sign their direct debit form before the mortgage funds are sent to the Notaire.
Repayment Dates
Many French banks allow you to choose your preferred date for your French repayment mortgage monthly payments.
Once you have the payment schedule for your monthly repayments you can set up Foreign Exchange transfers so that the account always has the funds available.
Fixed Rate
If you have opted for a fixed rate French repayment mortgage the direct debit amount will be identical throughout the term of the mortgage, whatever happens to interest rates.
Variable Rate
If you have opted for a variable rate French repayment mortgage the payments due are likely to vary through the course of the mortgage.
However, the monthly repayments will not change unpredictably.
With a French repayment mortgage a French bank will try keep the monthly repayments at exactly the same amount.
If the interest rate goes up, a French bank can extend the term so the mortgage will take longer to pay off, the payments will remain constant.
If the interest rate goes down, you will be overpaying and the mortgage will be paid off sooner.
A French bank will not allow you to reduce the monthly payments to keep the mortgage term the same.
Of course, the mortgage term cannot be extended indefinitely. If an interest rate increase implies the mortgage has to be extended by more than five years the bank may have no option but to increase the monthly repayments. Always read any correspondence from the bank!
French Repayment Mortgage Adjustments
Most mortgages arranged by Best French Mortgage also allow you to manage monthly repayments.
If you have a pay rise or a bonus, you can ask the bank to increase your direct debit.
If you have to change jobs or have unexpected bills, you can ask the bank to decrease the direct debit for a period.
Some mortgages allow a mortgage holiday during which no monthly repayments will be collected for an agreed period. The interest on the outstanding capital will continue to accrue. Consequently when you recommence paying the repayments will be adjusted upwards .