Real Estate: Going Around Assisted Loans to Reduce the Cost of One’s Credit

Despite historically low mortgage rates, it is possible to further reduce the overall cost of borrowing by going around the many credits at subsidized rates.

Devant une agence immobilière à Paris, en 2008.

Despite historically low mortgage rates, it is possible to further reduce the overall cost of borrowing through many soft loans. Put end to end, they reduce the amount of the monthly payment.

  • PTZ + (zero rate loan plus), reserved for new and old to renovate

The latest version of the PTZ came into force on January 1 and will be valid until 31 December 2017. The loan is for the acquisition:

  • a new home;
  • social housing sold to its occupants;
  • old housing in poor condition in one of the 6,000 eligible rural communes, under conditions of rehabilitation works.

It allows people who have not owned their principal residence in the past two years to benefit from a zero rate credit. Provided that it does not exceed resource ceilings.

These depend on the geographical area and the size of the family. For example, this year, to obtain a PTZ +, the 2013 reference tax income of a single person must be between 22,500 and 36,000 euros per year.

In addition, the amount of PTZ + is variable. It can only be used to finance 18 to 26% of housing, within certain limits: from 100,000 to 150,000 euros for a single person for example. Finally, its repayment duration is from 8 to 16 years, depending on the resources and the composition of the home.

  • Assisted loans, by profession or status

If you are an employee (or retired for less than 5 years) of a private company that contributes to one of the 23 inter-professional housing committees, you are entitled to a loan Housing Action (former loan 1% housing).

Accessible only to first-time buyers who want to buy their principal residence in new or old without work, it can not exceed 30% of the overall funding envelope. In addition to a ceiling of 7,000 to 25,000 euros, depending on the resources of the borrower and the geographical area. An amount that can be increased from 5,000 to 10,000 euros in specific cases (professional mobility, the purchaser under 30, tenants leaving the HLM park, etc.).

The housing loan is granted for a maximum of 20 years at a rate dependent on that of Livret A: it was 1.25% in 2014. To benefit from it, contact your company or the organization to which it pays contributions.

Civil servants and public servants benefit from the Real Estate Loan Official to buy their principal residence in new or old, with or without work. It is granted for a maximum of 15 years, provided that the funding envelope already includes a loan agreement.

  • Agreed loans, with a safety net

These loans are granted without a means test to all the people who want to buy their principal residence in the new one or the old one. Its maximum duration is 35 years. The rate depends on banks, it is capped at the rate of wear or in H1 2015: 4.57% for a fixed rate loan and 4.15% for a variable rate loan.

The advantage of this loan: the borrower can receive each month the personalized housing assistance (APL) paid by the Family Allowance Fund, provided that its resources allow it.

  • Loans from local authorities, variable according to a geographical area

Last possibility: depending on the region, the department, the agglomeration or the municipality where you live, you can obtain one or more small loans at subsidized rates, or in some cases a subsidy. Their amount very often depends on the borrowers’ resources, but also on other criteria (living in the city, being under 25, etc.).

In Paris, there is the 0% Paris Housing Loan, accessible, subject to resources, to all first-time buyers in Paris who buy their main residence in the capital. To benefit from it, a single person must have a reference tax income of fewer than 36,623 euros in 2015 (36,239 euros in 2014): he will then be able to borrow at a rate of 0% up to 24,200 euros over 15 years.

This type of credit help exists in many major cities (Caen, Marseille, Rennes, Saint-Malo, Toulouse, …), but also at the department level (the Hauts-de-Seine in particular). For more information, contact the housing department of the town hall of your place of residence.