Duration and Age France

Duration and Age France

Regarding the age aspect, the financing culture in France is different from that in the Netherlands. The maximum age at which a mortgage must be terminated is at age 75. A single bank can finance up to age 80. This aspect has an impact on the maximum term and thus the feasibility of a mortgage application.

Maturities of 25 years are possible for non-resident buyers, but at some French banks the maximum maturity is up to 20 years. However, with a higher starting age of the mortgage, the term may be shortened by the upper limit of age 75 or 80.

If the starting age shortens the term of the mortgage to be applied for, the monthly charge on an annuity mortgage will be higher. This can have an impact on the maximum amount to borrow. After all, the higher monthly burden may cause the assessment standard to be exceeded.

When mortality insurance is mandated, it can also impact the term. If a bank makes it mandatory to purchase insurance from them and the maximum end age of the insurance is less than age 75 then this can shorten the term.

Of course, not being able to obtain death benefit insurance for medical reasons at all can be a showstopper. Sometimes such a shortcoming can be circumvented.

France has legal rules against “usury. If the effective interest rate exceeds a certain threshold(taux d’usure) then this can be a problem because the bank is then not allowed to lend. In addition to the closing commission, the effective interest rate also includes the premium for term life insurance. Thus, with advanced age or premiums increased for medical reasons, this may come into play. Even with relatively small loan amounts of approx. €100,000 this problem does sometimes play a role, because additional costs then weigh more heavily in the effective interest rate.