First, there are bank home loans. This is the most common type of funding. They are granted by most financial institutions and apply to any type of real estate project, whether it is the purchase of a main, secondary or rental residence.
Bank home loans
The amortizable loan
The amortizable loan is the most common type of loan in France.
Each month, the amount paid by the borrower amortizes part of the capital borrowed. It thus reimburses the interest on the mortgage.
On the last due date, the loan is then fully repaid.
The borrowing conditions are quite flexible. There are no clearly defined regulations. However, it is better to establish a loan file that is convincing enough to obtain a positive response: high income, low debt ratio, stable professional situation, significant personal contribution, etc.
There is no fixed ceiling. However, you must take out a minimum loan of $ 75,000.
The term of the loan generally ranges from 25 to 30 years. It varies according to the banking establishments. However, the larger the amount of the loan, the longer the repayment term.
It can be fixed, variable or modular. In order to find the best rate among banking establishments, you can perform simulations. You will then get a loan quote.
The depreciable loan is generally a loan associated with other home ownership assistance loans. A smoothing of your loans requested from your bank can allow you to balance your monthly payments.
The bridge loan (also called In Fine loan)
The bridge loan is also non-amortizable. That is to say, the monthly payments made do not allow the loan capital to be repaid.
It is intended for homeowner borrowers interested in rental investment: whether it is a property for sale or intended to be. So if you want to get an advance on the sale of your property, know that this advance will be refunded to the bank when the initial property is sold.
Note that it is necessary to have already saved for the funding to be granted. Indeed, the latter will be backed by the amount saved.
To take out an In Fine loan , you must have life insurance in the form of a savings account dedicated to repaying the final amount.
The amount of interest rates remains unchanged during the entire repayment period. It is generally superior to a conventional loan.
The duration is 20 years maximum.
Repayment of the amount borrowed is made with interest divided into monthly payments. These only apply to interest on the amount borrowed. Once the loan is due, the borrower repays the full amount of the loan. But each month, the borrower has the option to repay a smaller amount, so that he has more time to repay the full amount.
Home Equity Assistance Loans
Home equity loans are generally used to finance the principal residence of the homeowner.
Some loans may subsidize the full price of the property. Conversely, other loans will be “complementary” to financing. In this case, they will not exceed a quota fixed by decree.
Social accession loan (PAS)
The social accession loan (PAS) is granted on a means-tested basis to applicants. It is a loan with the possibility of subsidizing the entire property as well as certain additional costs.
It also opens up rights to APLs and allows you to benefit from reduced fees.
Awarded by the financial organizations having signed an agreement with the State, it has the following characteristics:
- it only finances the main residence, whether it be its construction, its acquisition or works (at least $ 4,000)
- it can be obtained without personal input
- it is not supposed to finance the totality of the acquisition costs, it is a partial financing
In order to benefit from the social accession loan, it is imperative to meet means conditions, fixed according to the geographic area of the targeted accommodation and the number of future occupants.
In order to benefit from the PAS, you must:
- Being French
- Hold a residence permit
If you are an APL holder, know that it will be easier to access the PAS, rather than a standard mortgage.
In order to benefit from this loan, resources must not exceed a certain ceiling, depending on the geographic area of the targeted accommodation and the size of the applicant household.
On the other hand, the social accession loan does not participate in the notary fees.
It is between 5 and 25 years (35 years exceptionally).
The loan under agreement (PC)
Without condition of income, the loan approved authorizes the rights to the APL, which has the consequence of facilitating the financing of the whole housing, through the reduction of the monthly payments
It is necessary to apply to financial institutions having signed an agreement with the State to benefit from this loan.
Furthermore, this loan is granted without means test. Nor is it necessary to provide a personal contribution.
The amount of the ceiling varies according to the rates.
With notary fees, they are generally lower than traditional mortgage loans.
From 5 to 35 years old.
The Zero Rate Plus Loan (PTZ +)
Intended for first-time buyers (with the exceptions mentioned below) wishing to access the property, it applies in particular to new goods. However, since January 2015, it is possible that it finances old goods.
The Construction and Housing Code provides for some exceptions.
- If you, or one of the inhabitants of the accommodation receive a disabled adult allowance (AAH) or a disabled child education allowance (AEEH). You must justify it with a 2nd or 3rd category disability card or inclusion mobility card attesting to the mention of disability.
- If you are the victim of a natural or technological disaster, making your main residence an uninhabitable place. It is therefore imperative to apply for the loan two years after the certificate attesting to the loss.
In addition, it is a complementary loan to finance. Indeed, it cannot be granted alone. It must be combined with other loans such as:
- The housing action loan
- Social accession loan (PAS)
- The loan under agreement
- The bank mortgage
- The home savings loan
It is necessary that you have not been an owner, in the two years preceding the subscription to the loan. It must also finance the construction or acquisition of a principal residence.
It is necessary to approach an establishment having signed an agreement with the State.
In 2018, the resource ceilings are as follows, for loans contracted on January 1, 2016:
Resource ceilings for loans contracted on January 1, 2016
|Single||Couple with two children|
|Zone A||$ 37,000||$ 74,000|
|Zone B1||$ 30,000||$ 60,000|
|Zone B2||$ 27,000||$ 54,000|
|Zone C||$ 24,000||$ 48,000|
It generally corresponds to 40% of the total cost.
It should be noted that these amounts correspond to the reference tax income for the penultimate year (year n-2).
Like the resources of borrowers, the amount of the loan is also conditioned: it depends on the geographic area of the targeted property.
The amount of the PTZ is calculated by applying a certain percentage to the total cost of the acquisition:
amount of the PTZ in percentage according to the geographical area
|Zone A||Zone B1||Zone B2||Zone C|
The application of a defined percentage implies that the PTZ cannot be used to finance housing in its entirety.
Duration of reimbursement
It ranges from 20 to 25, with a deferred period of 5 to 15 years, during which repayment of the loan is suspended. As for reimbursement conditions, they depend on income, household composition and the geographic area of the property.
The Home Savings Loan (PEL)
If you have a real estate project that consists in acquiring or building a main residence, the housing savings loan (PEL) is perfectly suited to your needs.
The ELP consists of a savings phase of up to 4 years. At the end of this period, it is possible for the borrower to take out a mortgage or to make any other use of the sum acquired.
If you opt for a mortgage after these 4 years, know that you can access particularly advantageous rates with the chosen banking establishment.
- Be a natural person (and not a legal person)
- Not hold an ELP in another banking establishment
- Pay an initial amount of 225 euros minimum
- Feed the PEL at least 540 per year. This amount can be paid monthly (45 $) ,, semester etc through an automatic debit from the current account.
Not to mention that you can only subscribe to one ELP per person. For example: within a family made up of a couple and three children, there can be 5 ELPs.
It is limited to $ 61,200.
Since August 1, 2016, the interest rate for the ELP in 2018 is 1% gross (0.70% net after application of the flat tax).
But if you opened an ELP before this date, you must then refer to the fixed rate in force at the signing of the contract.
In addition, the interest acquired each year can be capitalized : thus each December 31, they are added to the capital saved and generate additional interest.
It ranges from 2 to 15 years.
The Home Savings Account (CEL)
The housing savings account provides preferential interest rates in order to acquire real estate. In addition, there are real estate projects.
To obtain this loan, the account must have been open for more than 18 months. It must also have yielded interest, fixed according to the operation to be financed, whether for works, construction or acquisition.
Like the ELP, this credit must in most cases be requested from the bank where the account was opened.
It is limited to 23,000 $.
The interest rate is variable. It is evaluated according to the savings period on the account.
Duration of repayment
Between 2 and 15 years old.
The housing action loan
The housing action loan is allocated to salaried borrowers. It is used to finance part of the principal residence concerned.
For the conditions to be fulfilled, they apply to both the employer and the employee.
The Paris housing loan
The City of Paris has set up a unique system to help Parisians acquire new or old real estate within the inner city walls of the capital.
Thus, the “Paris housing loan 0%” (PPL 0%) is a free credit, allocated according to the resources of the applicant (we must consider the tax reference income).
Tax resources according to the size of the household
|Household composition||Reference tax income|
|Single person||$ 37.506|
|Couple with a child||$ 69,362|
|Couple with two children||$ 82,812|
|Couple with three or more children||98.528 $|
The ceiling is $ 24,200 for a single person. It is $ 39,600 for households of two or more people.
It is estimated at 15 years.
How do the rates for home loans work?
Fixed rate loan
With the fixed rate loan, the monthly payment of the credit is known from the signing of the contract.
The variable rate loan
Perceived as being the most risky, this type of interest rate varies according to the market. The interest rate is revised periodically by the bank, according to the evolution of its benchmark index.
- With hedging, the rate variation is limited.
- With a rate +1 -1, for example, the starting rate cannot exceed the limits set. This loan offers a higher rate than a revisable loan without cover. But it does reduce the risk of a sharp rate hike.
The adjustable rate loan
On the other hand, the adjustable rate loan fluctuates over time according to a benchmark index.
Most of this type of loan have been regulated in order to protect borrowers from rising rates. They are thus more attractive.
The guaranteed loan
It is with a guarantee organization that the guaranteed loan is granted to the borrower. He then sees his mortgage guaranteed.
The smoothed loan (or loan with repayment stages)
The smoothing of loans results in an adjustment of the repayments of a mortgage, according to the repayments of other loans.
This system gives the possibility of obtaining an approximately equal monthly payment throughout the financing.
The modular loan
Finally, the modular loan authorizes the borrower to decrease or increase its repayments within the limits of the ceilings established for the loans contracted.