this proposal could change the life of those who took a loan with very low interest

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Using the money from a sale, not to pay back an existing loan, but to buy another home is the carryover principle, a situation that can become widespread.

Capital video: Property loans: this proposal can change the lives of those who have taken out a loan with a very low interest rate

Using the money from a sale, not to pay off an existing loan, but to buy another home is the carryover principle, a situation that can become widespread. The rapid increase in credit rates since 2022 has slowed down many real estate projects. It is in this context that a bill was presented by Damien Adam, member of the majority, with the aim of generalizing the transferability of a real estate loan, BFMTV reported on May 10. This measure could allow the owners to finance the purchase of a new property with the sale of the old one. Since 2016, this practice has disappeared due to the drop in rates.

The bill proposes to generalize the portability of a property loan to allow borrowers to benefit from a more favorable rate when acquiring a new property. This measure aims to facilitate the real estate market and reduce costs for owners. The bill proposes in its only article, to insert a clause in every housing loan offer stating that the borrower can, if he wishes, maintain the conditions of the loan granted, when selling the property to buy a new one.. The benefit of this system is maintaining better ratios than currently with rates currently at 4% compared to 1% two years ago. The text also allows “to avoid the seller-owner having to pay early loan repayments, which can be significant», assesses Damien Adam in the justification of the text.

Streamline the mortgage market

If the interest rate on your first loan is lower than the current rates for your new purchase, you will necessarily be a winner ; otherwise, simply do not use this option. Portability already exists, but it requires a specific clause in the loan contract. But with the drop in rates since 2016, many banks have stopped including this option, fearing that low-yielding loans could leave them with losses if interest rates rise.

Portability can therefore make the credit market more fluid, which is recovering a little with the drop in interest rates. However, be careful, although the transferability of a home loan is beneficial for borrowers, it can lead to an increase in mortgage interest rates. Banks, which incur costs associated with raising capital, may be forced to adjust their rates to maintain their profit margins.

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