Posted on 10 September 2013
Ski homes in the French Alps got cheaper for UK buyers recently, thanks to nothing more than the euro losing value against Sterling. Given that interest rates in France are still at historic lows and there are some very attractive euro mortgage deals available, could autumn be an ideal time to snap up that home by the slopes you’ve been thinking about buying?
The exchange rate hit £1/€1.185 in the first week of September, 4 cents higher than the rate of €1.142 available just over a month ago on 1st August. This change in the rate means that a €150,000 ski chalet or apartment, for example in Chatel or Les Gets, has become around £4,700 cheaper for a UK buyer.
Meanwhile, typical of the very attractive mortgage rates currently available in France could be fixed rate of 3.35 per cent for 10 years or a variable-rate mortgage starting from around 2.60 per cent. Conditions will apply, so speak to a mortgage specialist before making a decisions.
As a brief guide, there are three main options for paying interest on a mortgage in France. In the domestic market, fixed-rate mortgages are the most common and therefore the most widely available. Secondly, with variable-rate mortgages the interest rate you pay fluctuates in line with changes in the base rate. Your final option is a ‘cap and collar’ or capped-rate mortgage – typically this product comes with a starting rate fixed for a specified period, after which it could fluctuate but never above a fixed rate – for example, one or two percentage points above the starting rate – for the duration of the mortgage term.
Having a euro mortgage can go in favour of British owners – if the euro weakens, their euro mortgage repayments drop in Sterling value in terms, making servicing them cheaper.