The Zero Rate Loan: Operation and Benefits
The new Zero Rate Loan has been in effect since 1 January 2019. This is a flagship government measure that aims to facilitate access to property especially for young people. New or old housing, resource ceilings, loan amounts, repayment terms, … discover everything that changes!
Zero Rate Loan Summary:
- The zero interest loan, what is it?
- How to access and use
- The advantages of the Zero Rate Loan
- What are the new repayment terms?
- How to subscribe or inquire?
- Can we cumulate the zero rate loan with other loans?
- What are the new loan amounts?
Real estate loan for first-time buyers, that is to say, those who purchase for the first time their principal residence, whether new or old. Nevertheless, if you buy in the old, it will be necessary to carry out works whose cost represents at least 25% of the total value of the operation.
The 2016 Finance Act also stipulates the obligation to occupy the dwelling for at least 8 months per year and for a period of at least 6 years from the first release of funds. The loan is a no-cost loan whose interest is borne by the State.
In 2018 Article 40 of the draft finance law extends and amends the loan. The text adopted by the National Assembly on November 21st makes the following changes:
- extension of the loan in the new zone A, A bis and B1 until 31 December 2021
- extension of the loan in the new zone B2 and C until 31 December 2019
- refocusing of the loan in the former on zones B2 and C
In 2019 the loan was renewed on the same terms as those in place in 2018.
planning tax that will allow this tax reduction.
What are the new repayment terms?
Depending on your income and the geographical location of the housing, repayment conditions are established and you are put in a bracket that determines the terms of repayment of your mortgage.
To calculate your repayment period, you first have to calculate the total household resources divided by the family coefficient determined by the number of people in the household.
The total resources of the household will allow you to know according to your geographical zone the total duration of the credit which is granted to you to repay the Zero Rate loan .
The higher they are, the shorter the loan term
The repayment period therefore depends on the borrowers’ income. Now, every borrower has a deferred repayment. The repayment of the Zero Rate Loan can begin 5, 10 or 15 years after the loan according to household income. The loan term can be extended over 20 years for the most modest households. It is also possible to prepay a Zero Rate Loan under certain conditions.
NOT loan, Housing Savings Loan (PEL), eco loan, employer loan or local loans offered by some cities or communities. However, it is not possible to obtain a buyback of zero interest credit.
However, the amount of the loan at 0% can not exceed the amount of the other loan (s) with a duration of more than two years to finance the operation.