Your thoughts please on clearing a French Mortgage

We are in the fortunate position of soon being able to clear the mortgage we took out with a French bank to by our maison secondaire six years ago. Financial issues are tricky enough in your own language so I wouldn't want to get anything wrong in translation.

With the current currency volatility there's no point discussing when the best time might be but we are looking for the most cost efficient way of transferring a sizeable amount of GBP to our French bank account.

Also, when we took out the mortgage, we bought a 'Nuance 3D' worth about 15% of the mortgage value by way of an 'assurance' and earning a reasonable amount of interest. We get an annual statement of its worth but would like to know if there is any 'penalty' for early settlement?

Your thoughts on this or any experiences you may have had will be very much appreciated.

Many thanks


I suppose it could be, but it depends on the relative interest rates. Try and work out the total cost of your mortgage over the period and then compare that with paying out the lumpsum (when you can) and then putting the remaining into a new investment (even a high interest saving account - if you can find one)
I know what I would do is to pay off as soon as possible. That way you have capital in the form of assets and presumably you still have the same earning power, so could again borrow against all of that, should you wish to.
It’s like most things, you need to see which scenario works out best for you.
Hope this is in some way helpful.

We're just at the begining of our mortgage, but the deal we got doesn't have penalties after two years (kind of like a UK Fixed Mortgage).. however we did this because we want to make sure we could pay off our mortgage asap, like yourselves.. We explained this to our mortgage advisor and he stated that it is financially more astute to keep the mortage and your the money in the bank....... maybe this is something to think about.


Thanks Nick. There's no charge for settling the mortgage early. I was, perhaps, more concerned about the 'Nuance' and wondered if it might be similar to a UK Endowment policy which loses value if cashed in early?

Nick has already answered - it depends on the contract, most of the time the answer is yes there is a penalty. just pop into your bank and ask them to do a simulation and it'll show exactly what you owe on a set date and what penalties, if any, there are giving you a total sum needed to settle the loan. To give you an idea, we're with crédit agricole and selling up earlier than expected, our penalty is a thousand or so on 80,000€ borrowed two and a half years ago but everything is very clear in the mortgage document and you can only really get out of the penalty, in our case, if you're on a forced job move.

In my experience it depends on the contract you signed for your mortgage. That should detail how much it will cost you to pay it off in one go.