Dear Members, we bought a house in France 6 years ago next to the Swiss border with a French bank, with the mortgage in CHF. The bank fixed the fx rate at the time which is now not in our favour.
We will shortly move to Switzerland and rent the house out. Is it possible to remortgage with a Swiss bank in this case or does the mortgage provider location depend on where the property is?
Thanks in advance…
So you want a new mortage and pay back the old one? There are two parts to a possible answer, which I am unable to give.
Typically, a mortgage contract has a duration, principal and an interest rate. The bank has a right to duration x principal x interest rate. That’s the price you normally have to pay to exit a credit contract. Maybe in your case, it is handled differently?
Is a Swiss bank willing to lend you money based on a property in France? Probably yes, maybe not, it will then be a secondary or commercial residence which might change the LTV (loan-to-value) you now have. Did you ask any Swiss banks yet?
What are the conditions of your French mortgage?
Is an early reimbursement possible?
Under which conditions? Any penalities? What is the impact of the CHF/EUR forex in case of early reimbursement?
I can only recommend you to read the loan contract and contact the French bank for further details.
For the refinancing, contact CA next bank. They are not the only one on the market but it’s a good start to discuss the feasibility of your project.
Only a few bank in CH do mortgages on properties in France. You already had a salary in CHF and that’s why you took a CHF mortgage ? Are you allowed to repay directly in CHF instead of EUR ?
There are a handful of Swiss banks that offer mortgages for properties in France, with Crédit Agricole next bank advertising this specifically.
From what I understand from your post though, the main issue is the currency exchange rate (CHF to EUR, I assume?). You could consider using an affordable exchange service to convert the francs you earn into the euros you use for your mortgage payments. There are many to choose from (Neon, Wise, Revolut, Exchangemarket, Wechselstube, etc.) Alternatively, you could use the euros you earn from rent to cover at least part of the mortgage payments.
I would see little value in refinancing with a Swiss bank, as there are very few Swiss banks that accept mortgages for French real estate. That makes for very little competition in the market, compared to the numerous mortgage offers you can choose from in France.
They have a CHF mortgage if I read the post correctly.
I assume this let them have a much cheaper rate than with EUR, but now they complain that EUR has devalued (as expected, given the rate differential).
Aha. That’s right. I missed that.
It may be worth looking at current French mortgage offers in CHF and comparing with what you could get from CA Next Bank.
It’s worth noting that Swiss mortgages for foreign properties still have to follow the mortgage rules of the country in which the property is located. So no being able to carry a primary mortgage indefinitely, etc.
No that is not correct you can get a Swiss mortgage on a French property. With CA next bank for instance you can repay to 50% of the value of a vacation home in France and only pay interests thereafter.
Interesting. I didn’t know French laws allowed for that arrangement. I know that is not possible for properties in Germany.
If you sign the mortgage in CH with a swiss bank you are not bound to the french laws. If you sign the mortgage with a french bank in France of course french laws apply.
I’m not sure which laws would apply (generally the location of the property determines the jurisdiction), but it seems that prêt “in fine” mortgages are allowed in France. I learn something new every day.
Getting a quote from CA Next Bank certainly wouldn’t hurt.
AFAIK the penalty for a premature exit from a French mortgage agreement cannot be higher than 6 months’ worth of interest charges. Obviously the penalties have to be accounted for when comparing costs.
I know the canb financing offer and I m sure they don’t ask you to repay once you reached 50% of the property value, at least on a vacation home in France that is not your primary residence. For that financing the max redemption duration to reach 50% would be 25 years and you would need to provide 33% of equity from the start.