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Great Mortgage Deal

Posted by dzj744 - Created: 13 years ago
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10 replies (Showing replies: 1 to 10)

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Posted by Andy G-190935 - 13 years ago

You also have to consider how long you intend to keep the property. I base all my calculations over a 5 year period. I have a (yearly) variable rate, and although it will increase this year and next year, it started low, so it will probably take 3 years to reach the same level as the fixed rate I was offered at purchase time. So averaged out over say 5 years, I still save money. Also, with the lower rate/longer period I was able to borrow more, and invest more, so I win back more for every % increase in property value.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

It's really been uk principle in boom time - borrow as much as you can over as long as you can with the lowest possible monthly repayments. The risk is now that your investment may not increase in value faster than the loan interest. If house prices rise by at least 4% per year averaged over the next five years then I will win back on my investment. Buying a house that needs renovation will also help increase the value beyond that figure.

In the end, it's not my monthly payments that will settle my mortgage but the return on my investment at sale time. I would be quite happy to take a lifetime mortgage, or an interest only loan if I could get one. A non-repayment mortgage would be nice!

ps I got a good deal through mortgagefrance.com

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Posted by squeezy99-198138 - 13 years ago

As I said earlier in this thread I started with http://www.meilleurtaux.com/ and after meetings with the top 3 plus our current bank the Banque Populaire came out best.  They are one of the few national banks here so the final details can be arranged via our local branch.  You have to think about the total cost and not just interest rates.  Many banks charge for insurance but some re pay at the end, some wil cut the arrangement fee if pressed.Dave

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Posted by Zeynep-183200 - 13 years ago

babar - "fixed rate and not variable", because mortgage rates are based on ECB repo rates, and those are at the astonishingly low level of 2% at present, due to the sluggish revival of Eurozone economy. ECB is expected to start raising interest rates in about six months, which will lead to an immediate increase in mortgage rates. (In fact, even before they do, the expectation of an imminent raise in interest rates will boost long term credit rates such as mortgage rates, possibly in the next couple of months)

This is why, it is preferable for the borrower to lock in a fixed rate for a mortgage when base rates are so low. Or better yet, get an interest rate cap, whereby you start paying as if for a variable rate mortgage, but your payments stop increasing when the cap (say, +1%) is reached.

Zeynep

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Posted by Zeynep-183200 - 13 years ago

Hi Dan - We are also doing a mortgage with BNP, and I agree with you that their rates are pretty good.

However, I suggest you also take a look at the +/- 1% cap model, in addition to the fixed rate. We have found that the MAXIMUM monthly payment in this model is LESS than the constant you will be paying... ever. And the initial payments, until rates rise 1%, are of course lower than the fixed rate payments by definition.

A better deal all around. If you have time to change your mortgage from fixed rate to rate cap, take the time to look into it.

Regards,

Zeynep

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Posted by topgirl - 13 years ago

me_2003, why is it better to take the insurance with another company?, and also, can you recommend a company?! thanks

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Posted by reinrev5 - 13 years ago

Societe Generale = about 7 Euros a month which includes some extra insurance for loss of card and other bits and pieces. NO cost to connect and NO cost to transfer money around (pay the EDF, pay the rent ....) but I haven't tried internationally. I find this normal, in doing my few banking needs from my computer I save them counter staff and cheques.

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Posted by topgirl - 13 years ago

donnahelyer, are you talking fixed , capped, or variable? thanks

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Posted by babar-198615 - 13 years ago

why fixed rate and not variable?  just a question as im not sure what the benefit is.barbar

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Posted by donnahelyer - 13 years ago

I tell you now that that rate may be good for the UK market but for France you may have just been done... With GE Capital in Cannes my mortgage is 3.1% and with Barclays you can even get a rate of 2.9%. In my experience BNP have been always the most expensive when it comes to Bank Charges

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Posted by squeezy99-198138 - 13 years ago

Most banks in France are regional.  I am looking for a mortgage at the moment and using Meilleurtaux gave me 7 good quotes and I have had meetings with 3 of these banks.  These quotes are from well known banks in France but from dfferent regeions to where I am buying.  The banks aranged the meetings in a branch convienient for me and the offers were cheaper than our local branches of these banks.  Also durig the meetings they made even better offers.  I would reccommend Meilleurtaux as a starting point.

Dave