The new Zero Rate Loan (PTZ) entered into force on January 1, 2019. It is a flagship measure of the government which aims to facilitate access to property, especially for young people. New or old housing, resource limits, loan amounts, repayment periods, find out what changes!
- What is the zero rate loan?
- Terms of access and use
- The advantages of the Zero Rate Loan
- What are the new repayment terms?
- How to subscribe or get information?
- Can we combine the zero rate loan with other loans?
- What are the new loan amounts?
- PTZ example
Terms of access and use
The Zero Rate Loan is reserved for first-time buyers , that is, the purchase of a home for the first time as a main residence, whether new or old. Nevertheless, if you buy in the old one, it will be necessary to carry out work whose cost represents at least 25%, taken into account in the total value of the operation.
The 2016 finance law also specifies the obligation to occupy the accommodation for at least 8 months per year and for a period of at least 6 years from the first release of funds. The PTZ is a free loan with interest paid by the state.
In 2018, article 40 of the finance bill extends and modifies the PTZ. Thus the text adopted by the National Assembly on November 21 brings the following changes:
- extension of PTZ in new buildings in zones A, A bis and B1 until December 31, 2021
- extension of the PTZ in new buildings in zone B2 and C until December 31, 2020
- refocusing of the PTZ in the old on zones B2 and C, but conservation in 2020 of the PTZ in zones B2 and C in the new
In 2020 the PTZ was renewed under the same terms as those in place in 2018 and 2019. Find out more about the conditions for obtaining the PTZ .
The advantages of the Zero Rate Loan
Finance a large portion of your loan
The Zero Rate Loan presents quite interesting conditions, the share of the total cost of the PTZ amounts to:
- 26% in zone A
- 26% in zone B1
- 21% in zone B2
- 16% in zone C
The Zero Rate Loan allows you to reduce your monthly payments and increase your borrowing capacity.
Depending on the number of people who occupy a household, the maximum amount of the operation that can be financed by the Zero Rate Loan increases, and the most modest households can spread the repayment over time.
The poorest households will benefit from a 100% delay in repayment, which can range from 5 years to 15 years.
A form of personal contribution for banks
The Zero Rate Loan is recognized as a personal contribution for banks and marks an agreement with the State. The borrower is free to choose his bank for his Zero Rate Loan and another for his mortgage, the bank however requires that the borrower take out borrower insurance to create a guarantee to the bank in the event of default.
The application for a zero rate loan does not take into account whether the property is an apartment or a house. There are no administration fees or interest. It simply needs to be bundled with a primary mortgage.
A tax reduction thanks to the development tax
If a home is financed by a Zero Rate Loan, then it is possible to reduce its tax charges. This type of assisted loan can be coupled with a development tax which will then allow this tax reduction.
What are the new repayment terms?
Depending on your reference tax income and the geographical location of the accommodation, repayment conditions are established and you are placed in a tranche which determines the terms of repayment of the ptz and your mortgage.
To calculate your repayment period, you must first calculate the total resources of the household divided by the family coefficient which is determined according to the number of people who occupy the household.
The total resources of the household will allow you to know, depending on your geographic area, the total duration of the credit granted to you to repay the Zero Rate Loan .
The repayment term therefore depends on the borrowers' income: the higher they are, the shorter the loan term.
From now on, any borrower benefits from a deferred repayment. Repayment of the Zero Rate Loan may begin 5, 10 or 15 years after the loan, depending on household income. The loan term can be extended over 20 years for the poorest households. It is also possible to make an early repayment of a Zero Rate Loan , under certain conditions, the criteria differ little from a classic early repayment .
How to subscribe or get information?
A request file is set up, you must provide the establishment that lends you money with all of your tax notices.
The lending institution that offers a zero rate loan must have signed an agreement with the State, take the initiative to inquire with the lending bank.
We offer you an interest rate loan simulator to see if you are eligible:
Can we combine the zero rate loan with other loans?
Only one 0% loan is granted per household and per operation. This is a complementary credit to the mortgage. It is quite possible to benefit from several regulated loans and thus combine a Zero Rate Loan with other loans such as the PAS Loan , the Housing Savings Loan (PEL) , the eco PTZ , an employer loan or local loans offered by certain cities or communities. However, it is not possible to obtain a zero rate credit buyback .
What are the new loan amounts?
The Zero Rate Loan system is extended to the whole of France (metropolitan France and overseas departments) with an increase in the loan that can represent up to 40% of the amount of the purchase of new or old housing, subject to conditions of works, against 18 to 26% previously. Depending on the geographical area, the increase in this financing “quota” goes from + 55% to + 120% of the amount of the PTZ.
Example, for a couple with two children buying accommodation in zone B1, the maximum amount of the PTZ is:
- $ 80,000, or 200,000 x 40%, if the amount of the transaction is $ 200,000;
- $ 108,000, or $ 270,000 x 40%, if the amount of the transaction is equal to or greater. at $ 270,000
Example of PTZ calculation
Some concrete cases to understand how the zero rate loan works:
PTZ example for a single person in the Paris region earning € 2,500 / month
PTZ example for a childless couple in Brest earning € 3,200 / month
PTZ example for a couple with 2 children in Vesoul earning 2000 € / month
To sum up :
The zero-rate loan is an aid from the French State allowing first-time buyers to buy their first home.
You must be a first-time buyer, occupy the accommodation for at least 8 months per year, for a minimum period of 6 years and respect a certain zoning.
It makes it possible to: finance a large part of the loan at zero rate, to delay the repayment, to be perceived as a personal contribution by the banks and to obtain a tax reduction.
The duration depends on your profile, it is determined according to your geographic area and household income.
We have a zero rate loan simulator that lets you know if you are eligible or not for ptz.