Buy the Paris warehouse at 7.67%, or wait and risk higher prices?

W

woodworksAndRoute

Property investor
Established
I’m considering a Paris warehouse priced at €165,600. Finance is currently quoted at 7.67%, and I can afford the payments, but I’m unsure whether to proceed or wait for cheaper borrowing. If rates fall before local inventory improves, extra competition could simply lift prices.

Rather than trying to predict both variables, which stress tests would you use? I’m particularly concerned about arrangement fees, early repayment costs, refinance assumptions and eventual resale. Please distinguish any actual French legal or contractual requirements from personal risk tolerance.
 
I’d compare fixed holding periods—say the period you realistically expect to own it—rather than just today’s payment against a hypothetical lower rate. For each scenario, total the deposit, arrangement fees, interest, and any early-repayment charge, then subtract the loan balance and plausible selling costs at exit.

Also run one case where refinancing never becomes attractive. If the purchase only works because you assume a cheaper refinance, I’d wait.
 
What loan-to-value, term and rate structure are being offered? A fixed 7.67% loan and one that can reset are very different risks. The warehouse use matters too: will it produce income, be occupied by you, or sit empty while you seek permission or a tenant? Monthly affordability alone won’t capture those carrying costs.
 
Agreed on needing those details, although I wouldn’t assume falling rates must push this particular property up. Warehouses have a narrower buyer pool than ordinary Paris housing, and cheaper finance cannot cure an awkward building or weak resale demand.

I’d stress the price both ways: modest appreciation, no change, and a decline. Then test payments at 7.67% and at any possible reset rate stated in the offer.
 
One practical distinction: portability, refinancing and early repayment are contractual questions, not assumptions to fill in from general discussions about France. Ask the lender or broker for the relevant terms and costs in writing, and have the notaire clarify the French transaction requirements that apply to this warehouse.

Personal tolerance begins after that: how much cash remains after completion, how long you could carry the property without income, and whether selling earlier than planned would create a serious problem.
 
That helps. My weak spot is clearly the assumption that I could refinance as soon as rates improve; I haven’t yet priced the fees or confirmed early-repayment and portability terms. I’ll rebuild the comparison around my expected holding period, include a no-refinance case, and test a lower resale price rather than assuming cheaper rates automatically raise this warehouse’s value. I’ll also get the rate structure and loan-to-value confirmed before deciding.
 
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