What is a 0 rate loan?
The 0-rate loan, also called "PTZ" is an interest-free loan granted to individuals, set up in 2005 to facilitate access to home ownership in first-time buyers.
This loan concerns the acquisition of a principal residence by the purchase of new housing or the acquisition of old housing (respecting certain criteria). In addition, obtaining a 0 rate loan is subject to conditions. It may not be the only way to finance the purchase. It must therefore be supplemented by other contributions such as a bank loan, a home savings loan, a social home loan or even a personal contribution. The terms of the 0-rate loan are set by Articles L.31-10-1, et seq. As well as Articles R.31-10-1 et seq., Of the Construction and Housing Code.
What are the terms and conditions for obtaining a 0 rate loan?
The 0-rate loan finances the acquisition of a principal residence, that is to say a dwelling which must be occupied at most one year after the acquisition, for a minimum period of 8 months. This 8-month period may be reduced in the event of force majeure, for health reasons or even in the event of professional obligations.
This principal residence must be the residence of the borrower, as well as of all the people brought to occupy the housing, for a period of 6 years from the obtaining of the loan. The borrower is not entitled to rent this residence during the 6-year period. However, as with the annual occupancy period, this period may be reduced if the borrower has to leave his home for:
- Death or disability of a person making up the household;
- Divorce or dissolution of a PACS;
- Unemployment for more than one year;
- Professional mobility (journey of more than 50km or duration greater than 1h20 between housing and the new workplace).
The 0-rate loan is granted to people who have not owned their main residence during the past two years (supporting documents: rent receipts, honorary accommodation certificate, etc.). However, there are exceptions. The 0 rate loan can therefore be granted to any borrower:
- Proof of a category 2 or 3 disability as described by article L.341-4 of the Social Security Code;
- Proof of an allowance for a disabled child or adult as indicated in articles L.821-1 to L.821-8 and L.541-1 to L.541-3 of the Social Security Code;
- Having been victims of natural and / or technological disasters as well as victims of an expropriation of extreme emergencies in the event that the main residence is uninhabitable (according to article R.31-10-3).
The 0 rate loan is granted according to the total amount of the resources of all the people brought to live in this new accommodation. In addition, marital status has no impact on the calculation of the number of people (the couple is therefore considered as two people and not as a common entity). An unborn child in the household is also taken into account in the number of people.
Table of resource ceilings as of January 1, 2016, depending on the number of people in the household and the geographical area determined by the decree of September 30, 2014:
number of people in the household
8 and +
What types of housing are funded?
The 0 rate loan can finance new homes but also old homes if the latter meet certain conditions.
For new homes, the 0-rate loan can be used for the construction of a home (from the purchase of the plans to the finalization), along with the acquisition of the land. It can be used for the purchase of new housing completed for a first occupation but also to transform premises into habitable housing and finally the acquisition of housing under a rental agreement.
In the case of old housing, since January 1, 2016, the law is more flexible and now concerns all geographic areas. However, only two types of property are affected by the 0 rate loan:
- Housing in the social stock in the event that the borrower acquires his own housing or housing belonging to his lessor which is located in the same department;
- Housing requiring work.
The work must represent at least 25% of the total cost of the operation and concern the creation or development of living or annexed surfaces, modernization or even the performance of work allowing energy savings (except for the work concerned by the eco loan at rate O). The borrower must provide proof to his credit institution. Thus he will have to provide a certificate of honor conforming according to a precise model (inquire with the organizations) as well as all the quotes justifying the provisional amount of the costs of the work. Once the work is completed, the latter must provide the invoices justifying the work. The borrower also has 3 years to carry out the work following the acquisition, otherwise he will have to repay the amount borrowed in full.
How is the 0 rate loan amount calculated?
As for the terms of obtaining, the amount of the loan at rate 0 will be fixed according to the number of people occupying the household, the resources of the latter, the total cost of the operation and the geographical area (A, B1, B2 or C) as determined by the decree of September 30, 2014.
When calculating the amount of the loan at rate 0, the amount used as a “resources” reference will be the higher of the following two sums:
- The amount of resources for year n-2 (i.e. 2014 for 2016) of all persons intended to live in the future accommodation, including those who were not previously attached to the tax household;
- The cost of the operation divided by 9. This cost corresponds to the amount of the construction or the purchase to which are added the negotiation fees. To date, notary fees and registration fees are not taken into account.
Ceiling of the total cost of the operation according to the zone and the composition of the household:
number of people in the household
5 and +
The amount of the loan at rate 0 is capped at 40% of the total cost of the operation. It is reduced to 10% for HLM housing.
What is the repayment term?
The repayment period is also dependent on the resources of the household, the number of people present in the household and the geographical area. This period varying from 20 to 25 years, is made up of two periods: a first period during which the borrower does not repay (ranging from 5 to 15 years depending on the borrower's situation) and a second repayment period. 'spread over a period of 10 to 15 years.
To determine the repayment period, the resources of year n-2 of the household are taken into account. If this amount is less than 1 / 9th of the total cost of the operation, the amount retained is the higher of the two. This amount will then be divided by the family quotient, depending on the number of people present in the household. From these calculations, 3 tranches were defined in 2016.
Ceilings determining the repayment installments according to geographic areas:
from 22,001 to 25,000
from 19,501 to 21,500
from 16,501 to 18,000
from 14,001 to 15,000
from 25,001 to 37,000
from 21,501 to 30,000
from 18,001 to 27,000
from 15,001 to 24,000
In tranche 1, the total period will be 25 years, with deferred monthly payments for a maximum of 15 years on 100% of the loan (i.e. a repayment period of 10 years). In tranche 2, the total duration increases to 22 years and the maximum duration for deferring monthly payments will be 10 (i.e. 12 years for the repayment period). Finally for tranche 3, the entire 0-rate loan will be for 20 years with a deferral period of 5 years (ie 15 years for repayment).
Where to get a 0 rate loan? What are the advantages and disadvantages ?
Any credit organization, such as large banking networks, having signed an agreement with the State can issue a loan at rate 0. The borrower then has the possibility of depositing his file in any establishment, even if the latter is different from its banking institution. It is important to remember that the credit organization reserves the right to refuse the loan request. This institution also has the right to require the borrower to take out disability-death-incapacity for work insurance. The borrower has the option of subscribing to this insurance in any establishment. Although this loan is interest-free, some costs are therefore incumbent on the borrower such as the security deposit linked to the 0 rate loan.