Property finance is available from selected banks in Monaco and along the Cote d’Azur for properties in either location (sees Banking in Monaco). The finance offered can be tailored specifically for the property buyer’s requirements.
In Monaco, the method of financing requires the property purchaser to bring assets to the lending bank for a minimum of 50% of the purchase price of the property http://www.relocation-monaco.com.
The more assets the client can bring to the lending bank, the more the bank can lend for the property purchase and the better the financing costs are for the borrower http://www.relocation-monaco.com.
Generally the maximum term a bank will extend the loan for is 5 years, but this can be renewed at the end of each 5 year term, generally for a maximum of 15 years. The assets can be either placed on a term deposit bearing interest or may be invested into a conservative portfolio to produce an annualised return that can either partially offset , or in some cases, fully offset the financing costs. The investment portfolio can be structured to include fixed interest bearing securities (bonds) or a balanced portfolio of bonds and high quality dividend bearing equities. The bank will charge an annualised management fee of approx. 0.50% for a fixed income portfolio and may be slightly higher if the portfolio includes equity. The amount of collateral required to be put up by the client will depend upon the type of investment portfolio he or she decides to invest the collateral into. The collateral may be in any major currency if the client does not wish to hold the collateral in Euros which will be the currency of purchase.
The banks in Monaco can lend a minimum of 50% and up to 100% of the property purchase price (subject to a bank approved valuation of the property) for a lending rate based on the current 3 month Euribor rate , plus a fixed annual interest charge of between 1.7-2.5% This is subject to variation and depends upon a number of factors such as the amount of collateral the client has with the bank, the lending value of the invested portfolio, the existing relationship (if any) the client has with the bank and the property itself. There will also be a fee for the administration of the loan process (frais de dossier) which is generally set at approximately 0.25% -1% of the loan amount. If the client chooses the rate can be fixed rather than a floating rate. This will depend on the current level of interest rates and other factors, such as the amount of collateral placed by the client, the property and the term of the loan http://www.relocation-monaco.com.