- Client: International high-net-worth individual and US resident
- Portfolio: Two Paris properties with a combined value of approximately €9 million
- Challenge: Required €5.5 million of refinancing while living in the US, with the existing loans approaching maturity
- Finance: €5.5 million interest-only refinance at 1.9% fixed for five years, with €1 million AUM
Paris continues to attract significant interest from international property investors, but refinancing high-value French property from overseas can present additional challenges. Enness was approached by an international high-net-worth client looking to refinance two properties in Paris and release additional liquidity.
The properties had a combined value of approximately €9 million, and the client wanted to raise €5.5 million across the portfolio. The application involved a cross-border financial profile, as the client was resident in the United States while seeking finance against property in France.
US residency can create additional considerations when arranging international private banking facilities, particularly where lenders need to assess the wider tax and reporting implications associated with a US-based borrower. Identifying a lender with experience in cross-border applications was therefore an important part of the process.
There was also a significant time constraint. The existing loans were approaching maturity, meaning the refinancing needed to be arranged within a relatively short timeframe to avoid disruption to the existing facilities.
Enness referred the application to its International team in London, who approached lenders with experience of high-value French property and international borrowers. The client’s wider financial position and the strength of the underlying Paris property portfolio were presented as part of the application.
The lender was prepared to provide the required €5.5 million facility on an interest-only basis. The mortgage was secured at a fixed rate of 1.9% for five years at the time, with €1 million of assets under management required as part of the banking relationship.
The resulting structure provided the client with the required capital raise while allowing the existing property finance to be refinanced onto a longer-term facility. The relatively low AUM requirement also helped preserve liquidity outside the private banking relationship.
The case demonstrates how property portfolio finance can provide a flexible solution for international clients holding significant property assets in France. Cross-border residency, loan maturity dates, property values and private banking requirements can all influence the financing options available.
For international investors looking to refinance high-value property in Paris, specialist lender access can be particularly valuable where conventional finance does not accommodate the borrower’s wider circumstances.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances. Assets placed under management can fall in value and returns are not guaranteed.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise. International property finance may also involve currency, tax and cross-border considerations. Exchange-rate movements may affect the value of assets or the cost of borrowing, while assets placed under management may fall in value.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
