Non-residents – Using a foreign mortgage to buy property in France?

15 January 2019

It is perfectly possible to take out a loan either in France or abroad in order to purchase real estate in France. A foreign bank financing the acquisition of a property in France can obtain security through a mortgage on a property also located in France.

What law will apply to the loan agreement – my national law, French law or the law of the country where the bank is situated?

Under the «Rome-I» Regulation, the loan agreement is governed by the law chosen by the parties, which will generally be that of the lender. In the absence of an explicit or implicit choice by the parties, «the contract shall be governed by the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence», i.e. that of the Bank.

How is a buyer-borrower protected by French law?

In France, the Law of 13 July 1979 requires lending institutions to provide their clients with a prior offer of credit which includes certain mandatory details such as the nature of the loan (fixed/variable rate, etc.), the amount, the term, the type of property financed (main residence, second home, etc.), the annual percentage rate and the total cost of credit. The loan offer, which must also include a schedule setting out the dates and the amount of the monthly payments, is valid for a period of 30 days. The law also gives the borrower a 10-day cooling-off period.

In what situations will the buyer-borrower be covered by this law?

– If the contract is governed by French law the Law of 13 July 1979 states that its provisions are public policy provisions and will apply in their entirety with no possible derogations. This will be the case even if the property is located abroad.

– If the parties have decided that the contract will be governed by foreign law their choice is restricted in this area and the Law of 13 July will apply insofar as a loan agreement for real estate is connected with the French economic order. For this to apply, the property must be located in France and the lender (the Bank) must be established or the borrower resident in France.

As a foreigner, am I able to benefit from favourable loans?

Foreigners living in France can benefit from all housing subsidies and schemes as long as they fulfil the prescribed conditions: building grants, special loans for home ownership, extension works or renovations to make a property habitable; personalised housing assistance (“APL”), state-assisted home ownership loans (“PAP”), assisted rental loans, loan agreements, etc.



Latest news


The firm Roche & Cie is an accounting firm registered with the Order of Chartered Accountants of the Rhône-Alpes region. Roche & Cie strives to offer you a set of useful tools to manage and guide your business activities.