Most French mortgages come with early repayment fees or penalties also know as ERC. If you have an existing French mortgage and are contemplating remortgaging in France, there are several things you need to be aware of .
Firstly ERCs are capped by law and cannot exceed the lower of 3% of the outstanding mortgage amount or the equivalent of interests paid over a 6 months period.
Besides, under certain circumstances, French lenders are not permitted to charge ERCs. More specifically, ERCs cannot be applied to French mortgages advanced after 1 July 1999 if the redemption of the French mortgage is due to :
1. the sale of the French property and the sale of the french property is correlated with a change of employment
2. the death of the borrower or co-borrower
3. unemployment of one of the borrowers