Finance & Taxation

Mortgages in France
- 1. Top Tips
- 2. Sterling or Euro Mortgage?
- 3. Loan Security
- 4. Lenders in France
- 5. Mortgage Types
- 6. Lending Terms
- 7. Subsidised Mortgages
- 8. Consumer Protection
- 9. Repayment Difficulties

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5. Types of Mortgage Loans in France

5.1. Capital and Interest Repayment
5.2. Interest Only
5.3. Bridging Finance
5.4. Equalising Mortgage
5.5. Equity Withdrawal
5.6. Home Income Plans/Lifetime Mortgages

5.2. Interest Only French Mortgage

These are mortgages mainly destined for landlords or prospective landlords who wish to minimize their monthly revenue outlay.

The mortgage is also used by those who pay high rates of income tax, because of the allowances on interest that are tax deductible on a property investment.

An interest only mortgage is called a prêt in fine.

In a strict 'interest only' mortgage, during the period of the loan the borrower pays only the interest portion.

Repayment of the capital is normally secured through an endowment policy taken out with the lender that pays off the capital at the end of the loan period.

There are variants on this approach, that do involve the repaymemt of capital during the later phases of the mortgage.

Next: Bridging Finance

Back: Capital and Interest Repayment

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