5. Mortgage Types in France

1. 5.1. Capital and Interest Repayment
   5.2. Interest Only
   5.3. Bridging Finance
   5.4. Equalising Mortgage
   5.5. Equity Withdrawal
   5.6. Equity Release

5.6. Equity Release Mortgages in France

Equity release schemes are those in which you release some of the equity value in your home, in return for a regular income or capital sum, with the mortgage repaid following your death.

In the UK, they are sometimes also referred to as ‘home income plans’ or ‘lifetime mortgages’.

This is a recent change in the mortgage market in France as, hitherto, this type of mortgage did not exist.

The only solution was to actually sell your home to an investor and to remain in occupation for life, receiving from the investor a monthly income and a capital sum.

This system was called a sale under viager. In the UK there are similar schemes know as ‘reversion plans’.

Now there is no need to actually sell your home as you can get a mortgage under viager.

So, part or all of the equity of in a property can be released, in return for a monthly income or capital.

As in the UK the loan is repaid following death of the occupant(s) from the sale proceeds of the property. Alternatively, they may also be repaid on sale of the property, if the owner(s) decide to relocate.

The regulations have only recently been published on these mortgages and to date there is only one offer in the market place, from Crédit Foncier , the specialist mortgage arm of the Caisse d‘Epargne .

Early indications suggest lenders are going to take a cautious approach, with the terms of such mortgages tightly drawn, notably in relation to the age of the client and the loan to value percentage.

We are also hearing reports that expats are being refused access to this mortgage, for what appear to us to be rather spurious reasons. We would be very interested to hear if this has occurred to you, by e mailing us at editor@french-property.com