What is the renovation work loan?
Undertaking renovation work in a home allows it to be valued. The purpose of the renovation work loan is to help the financing of a renovation project, a development or any other type of construction related to real estate. The renovation work loan will allow, for example, to finance the expansion or the creation of a room, to dig a swimming pool, to build a veranda, to redecorate your house or to make energy savings. As part of a renovation work loan, the bank or credit organization makes a sum of money available to an individual who wishes to carry out work in real estate which he owns. The renovation work loan can be used for basic or comfort work. This loan can be granted for a main residence, for a secondary residence or for a rental property. In the case of co-ownership, if the renovation work affects the common areas, permission must be obtained from the other owners. It is important to note that most interior renovations are not subject to authorization (plumbing, electricity, interior decoration, etc.). However, any creation of a new living area of less than 20 m² with a minimum height of 1.80 m will be subject to a declaration of work (to be requested from the house). As for the creation of more than 20 m², the application for a building permit will be compulsory. With a view to a possible renovation work loan, there are, as an indication, estimates of the budget for the work planned for a dwelling, it is necessary to provide about 150 € / m² for light renovation work, 1000 € / m² if This involves redoing all the painting, electricity and bathrooms, and up to € 1,400 / m² for structural work (openings, creation of partitions, etc.). In order for these estimates to be as accurate as possible, the best solution is to have precise quotes drawn up by companies.
Are there different ways to get a renovation loan?
There is, in fact, a fairly wide range of renovation work loans. Depending on the importance of the work carried out, various renovation work loans may be offered.
The personal loan
The personal loan, commonly called consumer credit, is certainly the best suited renovation loan for work requiring only a small sum of money. Offered by all banks and credit organizations and accessible to all (subject to the eligibility conditions of each bank), the personal loan can be taken out for any type of work, whether the work is carried out by a company or no. The amount of this renovation work loan is capped at US $ 75,000, for a maximum period of 10 years. The money needed for the work is released as soon as the loan application is accepted. In addition, the overall effective rate (TEG) of the loan is reduced because there are no administrative fees. The personal loan does not require subscription to death and disability insurance either. If the borrower wishes to repay his loan early, he will not have to pay penalty fees either. Be careful, even if the overall effective rate (TEG) of the loan is reduced by the absence of application fees, you should know that the interest rate applied may be higher than that of other types of renovation work loans. Note also, you have a right of withdrawal for 14 calendar days from the signing of the contract for the renovation work.
The mortgage loan is the loan for renovation work best suited for work requiring the loan of a large sum. In most cases, this renovation work loan is taken out when you want to buy real estate, but it also allows you to finance everything related to real estate. The real estate loan therefore makes it possible to finance work. To subscribe to this type of renovation loan, the work will have to cost more than US $ 75,000. The repayment term can range from 10 to 30 years. This renovation work loan allows the borrower to benefit from a lower overall effective rate than for the personal loan mentioned above. In the event that the borrower has already taken out a mortgage for the purchase of real estate, the monthly payments may be global. However, it is important to remember that unlike a personal loan, the bank and credit organizations require the subscription to death and disability insurance and can also take guarantees (mortgage, surety, etc.). Administrative fees are also charged. As for the early repayment of this renovation work loan, it will cause penalties.
The housing savings plan (PEL) and housing savings account (CEL)
Holders of a housing savings plan (PEL) or a housing savings account (CEL) can benefit from a housing savings loan. Interest rates are often lower than those for other home improvement loans. In addition, borrowing in this way allows you to receive the state premium provided for these investments. In the case of this choice of renovation work loan, the work must:
- Or modify the living space of the accommodation (extension, development, division, etc.)
- Either contribute to the improvement, conservation, equipment or sanitation of housing
- Or allow energy savings.
This type of renovation loan does not cover the decoration of the home, such as paintings, wallpapers, floors, etc.
For this housing savings loan to be granted, the Housing Savings Plan must be at least 4 years old, compared to only 18 months of seniority for the Housing Savings Account. Regarding the Housing Savings Account (CEL), US $ 37 of interest must have been accrued by the borrower to be granted the loan for improvement works or US $ 22.50 for construction works. energy savings.
The amount of the renovation work loan depends on the total interest obtained on the CEL or the PEL and the chosen repayment period. There is no minimum, but a maximum of 23,000 US dollars with a Home Savings Account versus 92,000 US dollars with a Home Savings Plan.
The zero-rate eco-loan (eco-PTZ)
The zero-interest eco-loan, a commitment from the Grenelle de l'Environnement, makes it possible to finance the energy renovations of a home, which will subsequently prevent excess energy consumption as well as greenhouse gas emissions. tight. The zero rate eco-loan is one of the most advantageous renovation work loans because it is not subject to any interest, which is paid directly by the State. The amount of this renovation loan can go up to $ 30,000 and its maximum repayment period is 15 years. To benefit from this type of renovation work loan, the work must be carried out by a company with a recognized quality sign as guarantor of the environment (RGE). The payment of the zero-rate eco-loan can be made in one go on the basis of the detailed estimates for the planned work, or in several installments on the basis of the invoices for the work carried out sent at any time before the closing date. zero-interest eco-loan.
Here are the conditions to be fulfilled to benefit from this type of renovation loan:
- You can apply for an eco-loan at zero rate regardless of your resources;
- You can benefit from an eco-loan at zero rate whether you are an owner-occupant or lessor of your home.
- The accommodation must have been completed before January 1, 1990.
Please note, the same home cannot benefit from more than one zero-interest eco-loan.
For this renovation work loan to be granted, the work must concern at least 2 of the 6 actions of the following package of works:
- efficient roof insulation,
- efficient insulation of walls facing the outside,
- efficient insulation of windows and doors to the outside,
- installation or replacement of heating or domestic hot water production,
- installation of heating using renewable energies,
- installation of domestic hot water production using renewable energies.
It can also involve rehabilitation work on the non-collective sanitation system using devices that do not consume energy. The non-collective sanitation system refers to individual domestic water treatment facilities. These devices relate to homes which are not served by a public wastewater collection network and which must therefore themselves treat their wastewater before discharging it into the natural environment.
Finally, this kind of renovation work loan can be granted if it involves work justifying the achievement of a minimum overall energy performance of the housing. This measure only concerns owners whose home was built after January 1, 1948.
The work defined within the framework of a thermal study must make it possible to reduce the energy consumption of your home to:
- energy consumption of less than 150 kWhEP / m² / year, if your home consumes, before the works, more than 180 kWhEP / m² / year
- energy consumption of less than 80 kWhEP / m² / year, if your home consumes, before the work, less than 180 kWhEP / m² / year.
Each type of work corresponds to a financing and thanks to these different renovation work loans, many owners will ultimately be able to choose to stay in their home rather than move out.