I'm an expat living in Paris with a local wife, and I've recently discovered that you can get a 1.75% interest rate mortgage fixed at that rate for the 25 year term of the mortgage here. I'm hoping that someone can help me work out if we're better buying or renting in this kind of situation.
Our combined income is ~€6000 a month after taxes (although we expect her salary to go up when she moves from the public to private sector in a few years). We're currently renting a very small 1BR apartment for 1100€ a month and saving/investing 2000€ a month, but are now considering buying a modern bigger 2BR in our neighbourhood (outskirts of Paris in the 13eme arr., but lots of construction and lots of big businesses setting up around here) for around 600k-700k. I have 250k€ in ETFs and bonds, so would be pulling about 150k€ from the market to act as a deposit. This would cost us about €2.5k a month in mortgage repayments (plus 200-300€ in bills/HOA fees), meaning we'd only be saving/investing a few hundred a month on our current salaries. It is also worth noting that closing fees can be 10-20% of the purchase price here!
We could look at buying something cheaper, but our logic is that buying bigger means we could stay there long term and have kids etc without moving.
Our long term plan is to retire down to the much cheaper south of France, so the other option is to buy a cheaper house down there, try to rent it out (slower market so not guaranteed to find a tenant) and let that tick over until we reach a FIRE situation where we can leave Paris.
What would you do in our position? Keep renting or buy? Buy in Paris or buy in the south?
Appreciate the advice and help!
Submitted February 24, 2019 at 06:25AM by luckyexpatwanker https://ift.tt/2tCwPYZ
