French mortgages continue to make ski homes more affordable

Posted on 14 May 2013

It might be the end of the winter season, but there’s another reason other than skiing to visit one of the many great resorts in the Alps – namely, to take advantage of the excellent buying conditions and snap up a skiing property in time for next season.

End of season discounts are available to all buyers who look carefully, but anyone using a mortgage to buy a property in the French Alps today could have access to historically low interest rates. For example, a typical rate today for a 20-year fixed rate mortgage is 3.35 per cent, while for a 20-year tracker mortgage it could be from two per cent.

According to one French mortgage broker, “the current rates on offer are 0.25 per cent below previous lows which were last seen at the end of the Second World War, which means that the cost for a €100,000 loan has now dropped to €572 per month for a fixed rate over 20 years and €502 per month for a variable rate at two per cent”.

Competition between banks has been a key driver in keeping mortgage rates low, with banks estimated to have lowered their margins by around 10 per cent. Meanwhile, at the start of May, the European Central Bank cut interest rates for the first time in 10 months. This was in response to a drop in Eurozone inflation and rising unemployment. The ECB main rate is now at a record low of 0.5 per cent, down a quarter percentage point from 0.75 per cent.

Anyone intending to benefit from a cheap French mortgage and snap up a desirable property in the French Alps, could start their search for a property in the leading resorts of Les Gets, Tignes or Chatel.