A good balance sheet for the zero rate loan

As every year, the PTZ made a comeback in early 2016 with new scales applied for French households. The system will have reached its target of 120,000 beneficiaries this year according to the Ministry of Housing.

The zero-rate loan, is a regulated loan with no interest or fees. It exists since 1995 in France and has been set up to improve the affordability of the most modest households. It is a supplementary loan, which can only be subscribed in addition to a main loan. Often the loan at rate 0 will be considered as a personal contribution by the banks,


A year of success for the PTZ


Each year, the PTZ offers households with low incomes the opportunity to access property for the first time. This complementary loan, comprising neither costs nor interest, was set up by the French State with a view to helping first-time buyers. With more favorable conditions and a few new features, the PTZ was very successful in 2016.

To be able to benefit from this system, borrowers must finance a new main residence or, since 2016, old housing under work conditions up to 25% of the total amount of the acquisition. The PTZ allowed young property candidates to buy real estate faster than expected since the reduced amount of monthly payments allowed them to do so.

Since the zero-rate loan is means-tested, the household must have income below the ceiling set by the government, which fluctuates according to the household situation.


The PTZ will re-enter in January 2017


Despite the Court of Auditors’ report on inflationary risks and the high cost of the PTZ in France, the device will not be eliminated next year but could be reformed in 2018.

Otherwise, the criteria for obtaining this additional loan change every year, which means that the conditions for granting the PTZ 2016 will not be the same as those for the following year. The fundamental elements will obviously be preserved but according to several observers, it would be possible to note some small changes.

The geographic areas and the amount of the resource ceiling would therefore be subject to change in 2017 in order to further improve the scores for obtaining the regulated loan.

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