The French mortgage market for non-residents is experiencing growth problems as the number of transactions increases following the interest rate rises of recent weeks, reports French Private Finance.

“This is partially due to staffing issues at some banks who were not prepared for the continued spike in applications,” said John Busby, private clients director at the firm.

Some lenders have responded to this problem by temporarily refusing to accept any new applications. “The worst case so far is a cessation of all new business until September,” added Busby.

With increased lending frequency, banks are asking clients to place between 12 & 24 months of mortgage payments in an account, which would represent 5-10% of the loan amount.

“This is on top of the expectation for clients to have life assurance, home insurance and to maintain a good level of savings, continued Busby. “Whilst the fees and outlay for obtaining these loans may be costlier, there is a trade off, with lower rates offered as a result.”

As an example, the firm said that it can currently source a loan at 2.2% over 20 years at 60% LTV, with 12 months mortgage payments placed into a savings account and a fee of 1%.