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Notary office in Saint-Jean-Cap-Ferrat - FRANCE

Alain-Xavier BRIATTE, Partner Notary


June 2019

Optimising real estate refinancing in France (Techniques of the so-called "substitute" loan)

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The choice of technique for repaying an existing loan is a considerable economic challenge in a period of competitive rates. The cost of this repayment should be optimised, while guaranteeing the security of the new lender, with a technique adapted to the refinancing situation envisaged. We will focus on large mortgages for professionals or private individuals, for which optimisation makes sense, and we will compare the cost of release, subrogation and novation techniques; the latter technique (novation) may ultimately become the preferred technique in the refinancing environment. The costs of refinancing a professional loan, using the techniques of novation and subrogation, respectively represent 31% and 48% of the total amount of notary costs compared to the old technique of release followed by a new mortgage (based on 100%).

Summary of the costs of a refinancing

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