A French Equity Release Mortgage lets you release some of the equity capital locked up in your French home.

French banks are very cautious when evaluating applications for equity release. They will only permit you to release equity if you are intending to use the funds for “a qualifying purpose”.

French banks do not permit the use of equity release to augment income. Consequently if you are “asset rich but income poor” you are unlikely to pass a French bank’s mortgage qualification tests.

The French Equity Release Mortgage Options

In France there are three ways to release equity from your French home:

  1. Using a capital repayment French mortgage.  You pay interest and make capital repayments to pay down the French mortgage loan over the term.
  2. Using an interest only French mortgage. You pay interest on the French mortgage and repay the loan at term from other sources.
  3. Using Viager Sales. You sell your property as a Viager Investment. Then you continue to live in the property rent free. You get cash at the outset plus an annual income until you die. This is not technically a mortgage but it is similar to the equity release products available in other countries.

Depending on your circumstances, the best option may not be immediately obvious so let’s look at the options in detail.

Capital Repayment Option

This is likely to be the cheapest way for you to release equity from your French property.

If you have sufficient ongoing income to make a monthly repayment and service the interest payments on a French equity release mortgage this is likely to be your best option.

A French equity release mortgage requires you to declare the intended use of the funds. A French equity release mortgage will only be granted if the use of the funds is deemed by the bank to be for “an approved purpose”.

French banks are very strict as to their definition of “an approved purpose”, which does not include the use of released funds to support an income deficit.

This type of product is designed for someone with surplus income who may be considering their French Tax and inheritance position over the long-term and who would like to release equity from their French property to use for other purposes. Also it allows you to minimize the asset base in France.

Do I Qualify

Interest Only Option

An interest only French equity release mortgage lets you release some equity capital from your French home without making capital repayments every month.

Unusually amongst the range of French Mortgage Products, this product was specifically designed to reduce wealth tax,  Reduce French Inheritance Tax and Maximize Investment Portfolio Returns rather than to facilitate the buying of French property.

The terms and conditions are very strict.

Do I Qualify