Reasons for high net worth individuals to get a mortgage……..
*(an excellent and informative article written by our financial partner based on The Cote

Leverage and accessibility to cash :
In the previous 18 months, the cost of credit has significantly increased for borrowers, so
many international clients will question if opting for a mortgage is a sensible financial
decision. Many U/HNW individuals will have the means to purchase a property in cash; however,
opting for a mortgage can create financial flexibility.
The purpose of a mortgage is encouraged for long term financial planning and building
wealth. In uncertain times, it is important for wealthy clients to remain liquid instead of
locking up cash in a luxury assets.

For a business owner, the arrangement of a mortgage can be a useful tool to mitigate tax
concerns. For example, taking profit out of a company through a salary or dividend
means that income tax will be due. In some cases, this might be up to 40% in western
In a difficult period or economic recession; access to cash will be needed to support
U/HNW individuals lifestyle and fixed business costs. The macro economic situation in Europe remains unsettled with high inflation across the 27 countries. The inflation figures improved in June at 5,5% but in comparison the average cost of a 20 year fixed rate mortgage is around 3,7% (not including mortgage insurance or other costs). Broadly speaking, opting for a mortgage is still reasonable when compared
to the historical lending rates in the 1990s and early 2000s; whereby the boomer generation accepted interest rates between 7% to 12% - food for thought and predictions welcomed !

French Inheritance Tax :
A property located in France, will almost certainly be subject to Inheritance Tax (IHT).
The taxation rate varies from 5% to 45% of the net taxable portion. In the event of death,
the registration of mortgage (usually a bullet loan) can be deductible from the net market
value of the property.

This tax mitigation strategy works if your lender does not require a life insurance policy.
Many U/HNW clients looking at an overseas retirement property should consider taking a
mortgage (or Lombard loan).
In all cases of Inheritance tax planning seek a qualified financial planner to assess your individual circumstances.


  • both for millionaires and the rest of us right now -
    According to a CNBC survey of households with a $1 million net worth or more, 24% of
    investors say they’re keeping their portfolios in cash, up from 14% last year. This might
    be for the following reasons: uncertainty in the marketplace might present an opportunity so liquidity is favourable than locked up. For the first time in a decade investors are getting a favourable return on their savings.
    Another potential reason is market misery after a painful 2022 and investors moving back
    towards safe haven assets.

Finally, in an emergency, selling a property or seeking an equity release can take several months; so opting for a mortgage can provide flexibility to seize market opportunities with liquid cash.
"Taux d'usure": July 2023 market update and 2024 prediction from July 1st, the maximum lending has reached 5,09% for mortgage loans contracted.
over 20 years or more, an increase of 0,41% basis points over one month. This is the
first time since 2012 that the maximum lending rate has exceeded the symbolic 5%

As a reminder, the maximum rate to consumers is governed by the Banque de France
and has been closely monitored since February 2023; whereby the rate has been
adjusted monthly compared to quarterly.

According to VousFinancer, average rates charged by banks reached 3,8% in June for
loans over 20 years and more. We expect this to surpass 4% in July. Thereby,
household borrowing capacity has fallen by about 25% in two years. The Banque de France has confirmed credit production is 40% less in one year.

We believe that many lending institutions in France will reach a lending rate of 5% for
loans over 20 years at the beginning of 2024. It is widely accepted that sellers will need
to adjust their pricing strategy to fit a new market era of positive interest rates not witnessed in
France for more than a decade.

Declaration of property usage:
It is estimated that 34 million property owners in France must indicative to the tax
administration the state of occupancy of their home. This declaration must be done by
the 31st July 2023 for residents and non residents.

In a period of uncertainty, and rising interest rates, it might seem like the wrong moment
to purchase a property overseas for U/HNW investors. However, in many cases, it is
actually an excellent opportunity to diversify into a new market currency with hard assets
and hedge against currency fluctuations .
We've noticed the resurgence of American cash buyers (or 50/50 with mortgage) looking
to lock in the currency opportunity when 1 US dollar matched 1 Euro.
On the flip side, it might be an excellent opportunity for international sellers when a
strong Euro is against their home currency.
This might be applicable for Scandinavian and British clients holding Euro dominated

How can we help U/HNW individuals?
* Purchase finance. we focus on non residents & loan requests above € 1 million
* Refinance review your current mortgage facility before loan maturity
* Equity release raise debt secured against a luxury asset
* Bridging finance short term debt solutions
* Development finance liquidity available for property professionals
* Sale and leaseback investors purchase your property for a period of 24 months - up to
70% LTV
* Cross border financial review of global assets and solutions
* Alternative finance securities-backed lending (single stock loans, non listed stocks)

How do we support U/HNW individuals?
* Knowledge and experience for every situation
* Trusted network of industry contacts to find a mortgage solution. *Experienced deal maker for complex situations
* Managing expectations of clients and key partnerships
* Save time and money during a period of market uncertainty
* Dedicated point of contact to discuss all financial matters before and after loan facility.

For advice on financing from our trusted partners, or if you'd like to know how we can
help you find and buy a luxury property in France go to our website at www.buyersagentfrance.com or plan an obligation free discovery call here, or email us at contact@buyersagentfrance.com.

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