With French mortgage rates dropping and banks competing for buyers, now should be a great time to buy your ski property in the Alps.

However, for international buyers, while the mortgage rates in France are falling, the euro has seen its strongest surge in 16 years, rising 4.6% against the dollar and 2% on the pound.

Depending on your home currency, this can significantly impact your purchasing power.

For those financing their ski property from abroad, the currency shifts we’re seeing could add thousands to the real cost of a chalet, offsetting the savings made on lower mortgage rates.

The good news is, there is a way to take advantage of the lower mortgages and protect your money from the shifting exchange rate.

Falling exchange rates mean your ski property may be in reach

In past year, French mortgage rates have dropped by around 1%, tangibly reducing monthly fees.

At present, the average rate for a 15-year term is 3%, while a 20-year mortgage stands at 3.2% and a 25-year term at 3.4%. Buyers with strong financial profiles have been able to secure even lower rates, with some obtaining deals as low as 2.7% for 15 years.

Banks are also introducing special incentives to encourage borrowing, such as Société Générale’s 2.99% promotional rate on loans up to €500,000.

If you’re looking at buying off-plan, you can combine these falling mortgage rates with the 20% rebate available on new build propertiesto save even more.

And, of course, off-plan buyers already have greater flexibility in borrowing as payments can be spread more efficiently throughout the construction period, reducing overall financing costs.

Though, for all buyers, they should be aware of the rising notaire fees, which translate to an additional €500 in tax per €100,000 spent.

However, while securing the best mortgage deal is an important step, it is only part of the equation. The strength of the euro against other currencies could significantly impact the final cost of a purchase, even more so on a staged off-plan purchase where payments are made over multiple years.

It is essential to consider how exchange rate movements might affect you.

Currency exchange rates are constantly changing, shifted by world events

Exchange rate movements can eat up savings

You may have secured a fantastic price on a ski chalet, but if you’re purchasing in euros while earning in pounds, the actual cost can fluctuate unexpectedly.

Take, for example, a €1 million chalet in the Alps. A week ago, with the exchange rate at 1.21 GBP/EUR, the property would have cost £826,500. Now, with the rate shifting to 1.19 GBP/EUR, that same chalet costs £840,000 – an increase of £13,500 in just a matter of days.

This change alone outweighs the savings from securing a lower mortgage rate.

Reducing your mortgage rate by 0.3% on a €1 million 20-year loan might save €150 per month, adding up to €36,000 over the loan’s term. Yet, an unfavourable exchange rate shift could see you losing that amount – or more – before you even receive the keys.

If the euro continues to strengthen, ongoing costs such as mortgage repayments, maintenance fees, and ski resort expenses will also rise.

When buying off-plan, the impact of changing exchange rates can be even more pronounced. Unlike a resale property, which is usually paid for in a single transaction, an off-plan ski chalet requires multiple payments over months or years. This exposes you to fluctuations in the exchange rate, which can significantly alter the final cost of the property.

Off plan property purchases are particularly susceptible to exchange rate movements

If you were purchasing a €2 million ski chalet off-plan in Courchevel, with payments spread over two years, at the time of signing, you could pay a €400,000 deposit, followed by a €600,000 mid-construction payment, and finally, €1 million upon completion.

If the exchange rate is 1.21 GBP/EUR, the deposit would cost £330,600, the mid-construction payment £495,900, and the final payment £826,500, bringing the total cost in pounds to £1,653,000.

Now, if the exchange rate moves 5% against you and drops to 1.15 GBP/EUR, the deposit increases to £347,800, the mid-construction payment to £521,700, and the final payment to £869,600. This means your total cost rises to £1,739,100 – an increase of £86,100 simply due to exchange rate fluctuations.

That difference alone could cover high-end furnishings, premium upgrades, or years of luxury ski passes.

Mortgage rates vs exchange rates: what matters most?

Falling mortgage rates may reduce the cost of financing a ski property, but the impact of exchange rate fluctuations could erase those savings – or cost even more.

For example, securing a 0.3% lower mortgage rate on a €2 million chalet could save around €6,000 per year in interest. Yet, a 5% shift in exchange rates could add nearly £90,000 to the purchase price overnight.

While you can’t control the exchange rate, you can protect yourself against its shifts.

Now is an exciting time if you’re ready to buy a ski property

Taking advantage of today’s opportunities

It’s important not to be put off by shifting exchange rates, they are forever fluctuating. Sometimes your currency will be up, sometimes it will be down. Mortgage rates are traditionally slower to move.

And, because exchange rates change so often, currency specialists are available to help protect your money.

A currency specialist, like our partners at Smart Currency Exchange, can offer a service called a forward contract. This allows you to lock in an exchange rate for future payments, ensuring your budget remains predictable no matter how the market moves.

Ignoring currency risk could wipe out the savings gained from falling mortgage rates. If the pound weakens against the euro, your staged payments could become significantly more expensive. A forward contract eliminates this uncertainty, protecting your investment and giving you full control over your financial outlay from the moment you sign.

Ensure your ski property purchase stays on budget by securing the right currency strategy. Contact Smart Currency Exchange today to discuss how you can take advantage of falling mortgage rates and protect your money from a strong euro, and download their complimentary guide to currency.