The average rate for residential mortgages in France has fallen to 3.3%, the lowest rate since the Second World War, primarily due to the interest rate on long term government debt being at its lowest level for 200 years, according to Athena Mortgages.

John Busby, director of Athena Mortgages, said: “Quite simply, the cost of borrowing money in France has never been this cheap or secure for such a large number of people before.”

He continued “The euro may be strong now, but the fact that you can access near 100% funding means that it does not matter what the exchange rate is. The long term value of low rates, combined with low property prices, far outweighs any currency considerations. You can always buy Euros when the timing is right and your home currency is strong against the Euro.

“You can’t always buy property near the bottom of the market with historically ultra low interest rates. As the French market has fixed rates for the term of the mortgage as well as a wide range of capped products, you can limit your exposure to future rate rises and lock in long term value.”

In the future Athena states that some banks could start raising their fixed rates as early as November by up to 0.2%.

Athena also report that property sales transaction numbers are increasing in France, providing a knock on effect on French house prices. The number of transactions annually stood at around 800,000 or more for the five years preceding 2007, before sales numbers across France began to fall.

The main reason for these falls was a combination of very high interest rates and inflation just prior to the financial crisis and the collapse of confidence thereafter. This continued until the middle of 2009, when annual transaction numbers stood at just over 550,000. Athena say it should be no surprise that as mortgage finance became more affordable and the end of the world didn’t materialise, people were drawn back to the market especially as in some cases buying was deemed cheaper than renting.

Busby concluded “While transaction levels remain below their peak, bargains and discounts will still be possible to find but these will become rarer as the market picks up again.”