Mortgage charge or guarantee: what security for a non-resident borrower

No French bank lends without security. For a resident the question is settled in one line: a guarantee institution stands surety, the bank is covered, and the borrower recovers part of the outlay at the end. For a non-resident that line often falls away, and the file returns to an older mechanism, more expensive and heavier to undo: the mortgage charge. This guide explains why, what the bank will take, and what each option costs on the way in and on the way out.

It complements our reference page on mortgages for non-residents, which places the security among the other items of the file.

Why guarantees close to non-residents

A guarantee institution takes no charge over the property: it promises to pay the bank if you stop paying, then to turn against you. Its model therefore rests entirely on its ability to pursue you. A borrower who lives abroad, whose income lands in an account outside France and whose assets are elsewhere, is a risk it does not know how to recover. Some institutions accept residents of the European Union or Switzerland, where recovery procedures circulate; beyond that, refusal is the rule.

It is not a judgement on your solvency. It is a matter of the geography of recovery, and no file, however good, changes it.

The mortgage charge, and its two forms

When the guarantee slips away, the bank takes real security: a right registered on the financed property, allowing it to have the property sold if the loan is no longer paid, whatever country you live in. It is the natural security for a non-resident’s file, because it depends not on you but on the property, which is in France.

Since the reform of security law in force from 1 January 2022, it exists in two forms.

The lender’s special legal mortgage. It replaced the former lender’s lien. It can only secure the purchase of an existing property, not works or construction, but it is exempt from land registration tax: only the notary’s emoluments and the property security contribution remain. It is the cheapest real security, and the bank chooses it whenever it can.

The conventional mortgage. It secures any type of loan, including new builds, works and construction. It also bears land registration tax, 0.715 % of the secured amount, which makes it noticeably more expensive. It is required when the project includes a share of works financed by the loan.

In both cases, registration goes through the notary, who publishes it at the land registry at the same time as the deed of sale. It ranks from that date, and it survives the last repayment by one year.

The pledge, for wealth profiles

A third route exists for borrowers who hold a securities portfolio or a life insurance policy in France or in Europe: the pledge. The portfolio is given as security instead of the property, or alongside it. Private banks use it readily, notably on interest-only loans where the capital is repaid only at maturity. The advantage is twofold: no registration on the property, so nothing to release on resale, and a reading of the file based on assets rather than income, which partly sidesteps the discount applied to foreign-currency income described in our guide on borrowing capacity.

What each form of security costs, in and out

Security	On the way in	On early exit
Institutional guarantee	Commission and payment into a mutual fund	Nothing to release; part of the payment refunded
Lender’s special legal mortgage	Notary’s emoluments and property security contribution, no land registration tax	Release by notarial deed, charged
Conventional mortgage	The same, plus 0.715 % land registration tax	Release by notarial deed, charged
Pledge	Deed of pledge, reduced fees	Simple lifting of the pledge

The exit line is the one people forget. A mortgage charge does not lapse by itself on resale: if the loan is still running, or ended less than a year ago, the notary must draw up a release, and it has a cost. For a pied-à-terre kept for five years, that item deserves a place in the calculation from the start.

What it changes in the timetable and the total cost

The security is not a detail at the end of the file. Its cost enters the annual percentage rate, which the usury rate caps: a conventional mortgage on a file already heavy in insurance can push it over the limit and make the loan impossible to sign. It also weighs on the timetable, because registration requires the notary to be instructed early and to hold the accepted loan offer before fixing the signing.

That is one reason the partner broker deals with the security at the same time as the insurance, not afterwards: the two answer each other, and our guide on loan insurance from abroad shows the other half of the reasoning. What the bank will accept depends, finally, like everything else, on your country of residence: our guide to mortgages by country of residence sets it out country by country.

To set out your project and know which security will be taken before you commit, the complimentary personal study is the starting point.