Real estate loan zero rate loan

New or old real estate investment: the difference for the PTZ

The zero rate loan is a financing solution dedicated to the acquisition of a first main residence. It can be new housing or old housing. For the acquisition of old housing, renovation work must be planned by the purchaser. These works must represent at least 25% of the total amount of the loan. However, not all works are eligible for the PTZ, only improvement works such as cleaning up the living area are taken into account. As well as the creation of a new living space and all energy saving work. Renovations must be completed within three years of signing the loan offer.

Unlike old housing, the advantage of acquiring new housing or housing sold on plans is that it is not subject to transfer taxes. However, the real estate VAT of 20% remains applicable. The borrower can however benefit from a VAT reduced to 5.5%. In addition, housing is exempt from property tax for the first 2 years following the end of the work.

Whether it is to acquire new or old housing as a main residence, a zero-rate loan is only granted under certain conditions. In addition to being a first-time buyer, you must also meet other financial and zoning conditions.

  • The conditions to be fulfilled to benefit from a zero interest loan
  • Zero rate loan: all you need to know about the repayment period
  • Zero rate loan (PTZ): how much to borrow?
  • Where to apply for a zero rate loan?

The conditions to be fulfilled to benefit from a zero interest loan

To benefit from the zero rate loan, the borrower must be a first-time buyer. In other words, he must not have owned a primary residence for at least two years. However, an exception is made for people with reduced mobility. Conditions on the amount of resources are also applied depending on the geographic areas of the housing to be acquired and the number of occupants.

With regard to zoning, the more the residence is in a tense area, the higher the resource ceilings and the loan amount. In zones A and B1, the PTZ can finance up to 40% of the amount of the operation. In zones B2 and C, funding will only be up to 20% of the cost of the operation. The ceiling on household income also depends on the area and the composition of the household.

Zero rate loan: all you need to know about the repayment period

The term of the zero rate loan varies from 20 to 25 years and the repayment must be made in constant monthly installments, in a single period or in two repayments. The duration and amount of monthly payments are calculated by dividing the amount of resources or income of the borrower by the family coefficient, which varies according to the number of occupants. It is from the result that the loan repayment terms and the interest rates will be fixed. The borrower will thus be able to benefit from a 25-year loan depending on the repayment tranche. He can also get a grace period, which allows him to start repaying his loan only at the end of the deferral period.

Zero rate loan (PTZ): how much to borrow?

Obtaining and the amount of the zero rate loan depending on the total amount of the operation, the composition of the household, household income, the area and the condition of new or old housing. The amount of the PTZ can represent up to 40% of the amount of the price of old housing subject to work, or new. The banks recognize the zero rate loan as being a personal contribution, the borrower can therefore choose two different banks for his zero rate loan and his mortgage. But the total cost of the zero-rate loan must not exceed the amount of other loans taken out for a period exceeding two years.

Where to apply for a zero rate loan?

The zero rate loan can only be taken out with a credit institution approved by the State. As this is an assisted loan, the financial institutions offering it must be approved. This type of mortgage can only be granted by an approved establishment, because the State covers part of the interest generated in the form of a tax credit. The amount of this credit is calculated based on interest and monthly payments during the financial package. But as the PTZ is a complementary loan, insurance subscription may be necessary in addition to the guarantee offered by the State.

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See also

To have access to his first residence even one with a modest income, there are many possible financing options to make his real estate project a reality. Discover the different real estate loans available.