This clause allows you to keep your rate to finance a new principal residence. However, it appears less and less often in contracts. To the chagrin of the borrowers.
Keep the rate low for a new acquisition
The French who have contracted a mortgage in 2016 or 2017 are about to achieve a beautiful banking operation. Indeed, with the extraordinary fall in rates observed last year and rates that remain at low levels, the mortgage has seen its total cost decline. Benefiting from a particularly attractive rate encourages the acquisition of real estate.
After a few years spent in housing, residents may wish to see bigger or change their area following professional or personal developments. If the mortgage is still being refunded, the question of its future will arise.
As a general rule to acquire a new property, it will be necessary to sell the first housing. The proceeds of the sale will be used to repay the outstanding principal amount of the initial home loan. The remaining amount of money can then be used as a contribution for the subscription of a new mortgage at the rate in force.
Banks limit loan transfer
To buy a home while waiting for the sale of another property, borrowers can also turn to the bridge loan. This temporary credit ensures the transition between resale and purchase, but if the sale continues, the bridge loan can quickly see its total cost increase.
Finally, if the initial home loan has a particularly attractive rate, it may be interesting for the buyers to keep it. In practice, the loan continues to run and will be used to finance the new property. To benefit from this advantage, it is necessary that a clause authorize the transfer of loan. This clause in the mortgage agreement gives borrowers the right to retain their credit. The loan transfer is particularly interesting when the rates have risen between the old and the new acquisition. Not to suffer a higher rate limits the total amount of the new real estate transaction.
However, if this condition can be negotiated when the loan is taken out, it is increasingly difficult to obtain from banks. In view of the low interest rates observed in 2016, several banks have decided to suspend this option. Conversely, other banks have seized the interest of this option and do not hesitate to communicate on the transfer of loan to attract the largest number.