2. French Mortgage or Second Mortgage?

1. 2.1. Currency Risk
   2.2. Mortgage Tax Relief
   2.3. Level of Interest Rates

2.3. Mortgage Interest Rates in France

The level of interest rates in France has historically been well below rates in the UK.

The significance of this difference should not be underestimated.

On a loan of €100,000, with an interest rate gap of 2%, you might expect to pay around £1000-€1500 a year less with a French mortgage.

Over 20 years, therefore, you are going to be paying a lot more in interest payments through remortgaging than would be the case if you took out a mortgage on your French property.

On the downside, you need to weigh this saving with the greater currency risk that you face. There is no magic solution.

Most mortgages in France are granted on a fixed rate basis. You can read more about mortgage interest rates in France, and the choice between a fixed or variable mortgage rate, in our later pages on French mortgage lending terms, which you can find here.