Knowledge and Resources
French Lifetime mortgage : an innovative financing solution for borrowers over 65
In France, lifetime mortgages are known as Prêts Viagers Hypothécaires. A French lifetime mortgage is a long-term loan secured on a French property. Unlike a regular mortgage loan, you don’t make any monthly repayments as the interest builds up on your loan each year. A Lifetime mortgage does not need to be repaid before you pass away or before you decide to sell your property. A lifetime mortgage is a way of taking out cash from the value of your home, without having to move.
Who qualifies for a lifetime mortgage?
To be eligible to release equity with a lifetime mortgage, you must:
- Be over the age of 65 and under the age of 85
- Own a residential property in France worth at least €200,000
- Want to release at least €70,000
- Be a full time resident in France
- Evidence a minimum level of income
Some typical reasons for releasing equity with a lifetime mortgage might be to:
- Adapt your home, so you can continue to live independently
- Renovate or refurnish parts of your home
- Pay one-off private medical bills, or receive ongoing care at home
- Help children and grandchildren with house deposits, weddings or other major events
- Pay off an outstanding mortgage, including the shortfall on an interest-only mortgage
- Fund leisure interests, a new car, a holiday, or visiting relatives abroad
How much can I borrow ?
The maximum loan amount depends on the property value and on the age of the borrowers. Typically, it is possible to borrow between 40% and 50% of the appraised value of your property.
When is the loan repaid ?
A Prêt Viager Hypothécaire would end:
- If ALL borrowers were to pass away
- If the mortgaged property was to be sold
- If the borrower decided to repay the loan early
What happens with my lifetime mortgage when I pass away?
A lifetime mortgage is designed to be paid in full when you (or you and your partner, if held jointly), pass away.
The people who deal with your estate will be given a reasonable length of time to repay the loan, which is currently 12 months.
If the value of both the loan and the interest is in excess of the value of the house, then the debt repayment is restricted to the value of the house and to no more.
Feel free to get in touch for further information.