Remortgaging in France
Remortgaging works differently in France than in the UK, because most French loans are fixed for the whole term. You either renegotiate with your bank or have another bank buy out the loan. Here is when it is worth it, the costs, and the easiest saving of all.
General information. This is not an offer of credit or personalised advice, and no rate is guaranteed. Yann Nachtrieb, registered mortgage broker (COBSP) and insurance broker (COA), and financial investment adviser (CIF), ORIAS no. 26009903.
Two routes
There is no rolling "remortgage every two years" culture in France, because rates are fixed for the term. Instead you have two options. You can renegotiate with your current bank, which agrees to lower your rate to keep you. Or you can have another bank buy out the loan on better terms, which opens up competition and often achieves more.
In both cases, judge the result net of costs, by comparing the total cost before and after.
When it pays off
Three conditions usually need to line up: a meaningful rate gap between your old and new rate, often from around one percentage point; a loan still early in its life, when the interest share of each payment is highest; and a balance large enough for the saving to beat the fees. If all three hold, the gain can be substantial. If not, it is better to leave it.
The costs to factor in
| Cost | Renegotiation | Buy-out |
|---|---|---|
| Admin fee | Possible | Yes |
| Early-repayment fee | Not applicable | Possible (capped) |
| New guarantee | No | Yes |
| Competition | Limited | Strong |
General, indicative benchmarks. The real gain depends on your file. No rate is guaranteed.
The easy win: switch your loan insurance
People focus on the rate and forget the insurance. Under the Lemoine law, you can switch your borrower insurance at any time, without waiting to remortgage. For many borrowers, especially if you are younger or a non-smoker, that is the simplest and fastest saving to go after, often clearer than renegotiating the rate itself.
Frequently asked questions
Can a non-resident remortgage in France?
It is possible, though it depends on your profile and the current balance, as with any French loan. A buy-out by another bank follows the same non-resident criteria as a new mortgage.
Is there an early-repayment penalty?
On a buy-out, yes, there can be, but it is capped by law: no more than six months of interest on the sum repaid, or 3% of the outstanding capital, whichever is lower. It is sometimes negotiable.
Can I just lower the insurance?
Yes. Thanks to the Lemoine law you can change your borrower insurance at any time, independently of the rate. It is often the quickest saving available.
Is your loan worth revisiting?
Book a free 45-minute call, in English, by phone or video. No commitment.