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Real estate loan: borrowing over 30 years is possible

2024-01-19T05:17:21.522Z

Highlights: At least two regional savings banks now offer 30-year loans at very competitive rates. A level of debt which must not exceed 35% of income and a maximum loan term of 25 years. The average holding period for the first property in Île-de-France is less than ten years. Extending the duration of the credit makes it possible to reduce monthly payments which are now much higher than two years ago due to the level of rates. For 250,000 euros borrowed over 30 years, it is 100 euros less per month to pay compared to a loan over 25 years, for example.


At least two regional savings banks now offer 30-year loans. And this, at very competitive rates. From what


A level of debt which must not exceed 35% of income and a maximum loan term of 25 years (or 27 years in the case of major work).

These are the criteria, imposed since the beginning of 2022 by the High Council for Financial Stability, the famous HCSF standards, for granting real estate loans.

But banks can deviate from this, for 20% of their production.

While the sector is recovering, certain establishments are taking advantage of this flexibility to stand out on the credit market, by allowing borrowing over 30 years.

This is at least the case for two regional savings banks, Normandie and Île-de-France.

Reduce monthly payments or increase borrowing capacity

The latter, the largest savings bank in France, has been offering for a week, only to first-time buyers under 35, to borrow over three decades, with rates between 4.35% and 4.35%. .75%, depending on the profile.

“The idea is to have only a differential of 0.10% between the 25-year rate scale and that of 30-year loans, to prevent the benefit of the extension from being canceled by the cost of credit,” explains Alexandre Castagnon, marketing director of the Caisse d’épargne Île-de-France.

Extending the duration of the credit thus makes it possible to reduce monthly payments which are now much higher than two years ago due to the level of rates.

Thus, for 250,000 euros borrowed over 30 years, it is 100 euros less per month to pay compared to a loan over 25 years.

By increasing borrowing capacity, “playing over time also makes it possible to make acquisition projects possible, particularly in sectors where real estate prices are high”, such as in the Paris region”, adds Julie Bachet, director general of the broker Vousfinancer.

Also read: Agathe and Jordan managed to borrow over 25 years at less than 4%

“This offer allows us to differentiate ourselves from other banks,” continues Alexandre Castagnon of the Caisse d’épargne Île-de-France.

Before reassuring those who might feel frightened by this commitment over such a long period.

“It can allow people under 35 to become owners,” he says.

And during the life of the loan, nothing will prevent you from increasing the monthly payments, and thus reducing the duration and cost of the loan.

» Especially since the average holding period for the first property in Île-de-France is less than ten years.

Source: leparis

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