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Glossary of French Mortgage Terms

The following terms are common mortgage terms used when dealing with French mortgages. For reference, accomodating each definition is the English name for the term.


EURIBOR (EURopean InterBank Offered Rate)

English Term: Prime Rate

The EURIBOR stands for the European Interbank Offered Rate, which is a daily reference rate based on the average interest rates at which banks offer to lend unsecured funds to other banks in the European interbank market. Mortgage payments are tied to this index outside the control of the lenders with predetermined adjustments of the interest rates at specified intervals. Unexpected large adjustments can have significant impact on borrowers with variable rate mortgages, as their monthly mortgage payments may suddenly increase by large amounts.


Full Mortgage Repayment

English Term: Amortization

This is a mortgage loan that offers monthly repayments to cover both the interest and principal payments. Each payment is composed of a fraction of the debt capital, interest payments, and insurance premiums, if applicable. The total loan amount is amortized over the duration of the loan, usually around 20 to 30 years. This type of repayment does not require a large payment for the outstanding principal on the maturity date, which is required for interest-only mortgage repayments.


Mortgage Calculator

English Term: Amortization Calculator

An amortization calculator is referred to as a “mortgage calculator” in France. This has the exact same purpose as an amortization calculator, as it will help you calculator your monthly payments and estimated down payment and closing costs. All you will need to do is enter the purchase price of your property, total amount of loan, duration of loan, and the interest rate into the respective fields, and the system will auto-calculate the monthly payment amount. Please visit our mortgage calculator on our main website here.


Mortgage Insurance

English Term: Private Mortgage Insurance (PMI), or Lenders Mortgage Insurance (LMI)

In France, it is required for anyone taking out a mortgage loan to also take out a mortgage protection insurance policy to cover against the mortgage in the case of death or temporary incapacity to work. This is on top of the compulsory life insurance policy in France. The cost of the insurance is determined by age and health status of the borrower, and will be higher if the borrower has a higher probability of defaulting on the loan. The cost of this insurance is usually around only 0.5% of the loan.


Price per Square Meter

English Term: Price per Square Feet

Properties in France are measured per square meter, unlike the square feet measurement used in the United States. The conversion for the two measurements is:

1 square foot = 0.0929 square meters


Variable Rate Mortgages

English Term: Adjustable Rate Mortgages (ARM)

An adjustable rate mortgage (ARM) is called a variable rate mortgage in France. Although they essentially mean the same thing, please note that the word “adjustable” is not used as frequently in France. When you see the phrase “variable rate” or “variable interest rate,” think of the equivalent ARM in English terms.


Credit Scoring System

Unlike the American credit scoring system, assigning credit ratings to customers is not legal in France. There is no formal evaluation of a borrower’s credit history and ability to repay loans and other financial obligations. The only available records are two blacklists that the French banks and lenders refer to when dealing with customers with serious financial issues, such as those with multiple counts of overdrafts and foreclosures. To evaluate whether customers qualify for loans, French banks require a collection of financial documents, such as annual tax returns, pay slips, and credit card statements.