Are you interested in a French mortgage in 2014? If so, it may interest you to know that buying a property in France has become far cheaper recently, because the pound has risen against the euro. To be specific, sterling touched 1.2699 versus the common currency last week, its strongest since August 21st 2012, or 23 months.
What this means for you if you’re interested in a French mortgage is that, when you transfer money to France to buy a property, you’ll now receive a far higher euro total. In fact, were you to transfer £125,000 to France, you’d now receive +€16,950 more than if you’d done so back when sterling was weak, at just 1.1371, in March 2013. So clearly, this will make buying your dream French property much more affordable!
Why has the pound gained? Well, it’s because the UK economy has been blazing a trail for the past year. For instance, the UK economy is now +3.3% bigger than this time in 2014, pointing to far faster economic growth than any industrialised country. So, as the UK has shaken off the financial crisis, sterling has risen too!
Given this, how can you make sure you benefit from the stronger pound for your French mortgage? Well, one option is to consider a ‘forward contract’. This is when, if you don’t want to transfer your money to France now, you ‘lock in’ the exchange rate where it is. Then, you can exchange currencies at this rate any time you like in the next 2 years, even if the market changes in the meantime.
So in brief, 2014 is shaping up to be a great time for a French mortgage, as the pound flies high against the euro!
By Peter Lavelle at foreign exchange broker at Pure FX
This article was written by French Mortgages Made Easy