If you are considering purchasing a residence in France, you will need to know how a French mortgage works. Many people who have experience with mortgages are surprised to find that the French banking system is quite a bit different than those in their home countries.

So before you even consider applying for a French mortgage, here are just a few of the things that you should know.

To start, a French mortgage has a maximum duration of twenty-five years and the security is only taken out on the property. As in most countries, personal income and net worth are the most important factors when applying for a mortgage, as is your credit score. The maximum percent borrowed is 85 per cent of the purchase price, and the average is between 70% and 80%. And while all nationalities are welcome to apply for a mortgage in France, the interest fees and amount borrowed may be capped differently from actual citizens.

If you are looking to purchase commercial real estate and need a mortgage, you should know that companies must be registered in France to even apply for a mortgage.

So, with all these restrictions and regulations, why would a foreigner take out a mortgage in France? After all, you can simply transfer a mortgage from your home country. But the fact is that a French mortgage offers homeowners a number of attractive benefits.

Advantages

The reason many non-residents choose to obtain French mortgages is because of inheritance taxes, which are incredibly high in France at over a quarter of the property value. However, if you have a mortgage through a French bank, you will save a good deal of money on these taxes.