No need to break your piggy bank to do some work in your house. Tax Credit, Zero Rate Loan and other bank credits can help you complete your projects. Café du Patrimoine presents all the solutions to finance your small decorative work or your major renovation projects.
Among the various credit solutions that you can use to carry out development work in your main residence, you will have to make your choice based on:
- the nature and number of works envisaged;
- how you do this work: solo or with professionals;
- your budget: each credit has a different ceiling;
- your need for flexibility: the conditions of granting and the possibilities of arranging repayment (monthly payments, prepayment, etc.) vary from one type of credit to another.
We have therefore categorized the financing methods available according to the nature and amount of the work.
Finance expensive work
If your project involves large amounts of money and does not concern energy-related work, you can choose to take out a mortgage. In a context of still low interest rates, it may be appropriate to consider this possibility.
However, since 1 July 2016, the use of real estate loans for works has been drastically limited. A home loan can not be used to finance work unless two conditions: when it accompanies a loan financing the acquisition of a property that will receive the work or when it is secured by a mortgage or a suretyship. If your situation allows the use of a mortgage to finance your work, it will allow you to use the money as you wish, without energy performance requirements and sometimes even without paying invoices. For example, you can do the work yourself. It should be noted that some banks require that the work be done by professionals.
Note: in exchange for favorable rates and an uncapped amount – except for your debt capacity – the subscription of a mortgage involves the insurance of a borrower and any guarantees: surety, mortgage, etc..
In addition, you will be required to pay a booking fee and, if applicable, prepayment penalties.
Since 1 October 2016, banks must provide borrowers with a pre-contractual fact sheet based on consumer credit information which includes the main features of the proposed loan, and should allow them to compare available credit offers. on the market.
To find out more about real estate loans, consult our file Mortgage Loan
Finance intermediate works
Consumer credits can be used for everything, including financing your work. They are granted unconditionally (except resources, be careful not to get caught up in the spiral of indebtedness!), But have higher rates than real estate loans.
Many banks offer “work” credits among their supply of consumer credit. Conventional work loans are particularly suitable if you want to carry out work quickly to improve, refurbish or renovate your home. “This loan is very simple to set up and does not require any specific guarantee such as a mortgage or a deposit,” says Ludovic Huzieux, Associate Director at Artémis Brokerage.
They are usually offered with a fixed rate. The overall effective rate of this type of loan varies between 2.49% and 4.40% with an average of 2.96%.
For more information on consumer loans, see our article Consumer credit, comparative loan organizations
This solution is preferable for work at moderate cost that is not intended to improve the energy performance of your home and for relatively short repayment periods.
Finance energy renovation works
The State encourages households to carry out work aimed at improving the energy performance of their homes. The zero-rate Eco-loan can finance two to three types of work without resource requirements, while the Sustainable Development Loan allows to choose the number of jobs to be engaged. Both are conditioned to the respect of criteria defined by decree concerning the nature of the works.
Benefit from public aid for your renovation work, GRDF helps you to see more clearly
The energy transition tax credit (ISCED)
The subscription of an Eco-Loan as a Sustainable Development Loan must meet the same conditions as those to benefit from the Tax Credit for the energy transition. The latter makes it possible to deduct from the income tax 30% of equipment and / or labor expenditure for certain energy renovation works (amount of eligible expenses, capped at € 8,000 per person plus 400 additional euros per dependent). The tax credit for the energy transition concerns the acquisition costs of certain equipment supplied by the companies that carried out the work and / or labor for certain insulation works:
- Thermal insulation of roofs;
- Thermal insulation of the walls facing the outside;
- Thermal insulation of low floors;
- Thermal insulation of glass walls and doors to the outside;
- Installation, regulation or replacement of heating systems, where appropriate combined with economical and efficient ventilation systems or domestic hot water production;
- Installation of heating equipment using a renewable energy source;
- Installation of hot water production equipment using a renewable energy source;
- Regulation and programming of heating;
- Apparatus for individualizing the cost of heating or domestic hot water *;
- Connection to a heat network;
- Performing an Energy Performance Diagnosis (EPD) except where the regulations make it mandatory;
- Electric vehicle charging station *.
The energy transition tax credit is available to homeowners and tenants alike.
To be able to benefit from it, since January 1st, 2015, you will have to call qualified professionals RGE (Recognized Guarantor of the Environment). You can find these professionals in the directory of professionals RGE.
Eco-loan at zero rate
Attributed to homeowners or landlords, without means test, this loan is granted for eco-renovation work. The categories of work involved in the zero interest eco-loan are:
- Insulation of the roof;
- Insulation of the external walls;
- Replacement of exterior doors, windows and patio doors
- Installation or replacement of heating systems (possibly associated with efficient ventilation systems) or efficient domestic hot water production;
- Installation of a heating system using a renewable energy source;
- Installation of hot water production equipment using a renewable energy source.
The credit institution assesses under its own responsibility the solvency and the repayment guarantees presented by the borrower.
The most frequent granting condition is the realization of a work package: two minimum and three maximum. However, you can get this loan if the planned work allows you to achieve a minimum level of “total energy performance” of housing. Last possibility of granting: the work must aim to rehabilitate a non-collective sanitation system by a device that consumes no energy.
If you opt for the work package, you can benefit from a sum ranging from € 20,000 for two energy renovation actions to € 30,000 for three actions. This last cap also applies to the “overall energy efficiency” option, but you will only get € 10,000 to rehabilitate a non-collective sanitation system.
Subscribed without a fee, the Eco-Prêt à taux zéro can be repaid for a period of between thirty-six and one hundred and eighty months, but the work must be completed within two years of the loan offer.
To find out more, visit the website of the Ministry of Ecology, Sustainable Development, Transport and Housing or your bank branch.
Attention, you must imperatively provide the estimates of the craftsmen retained at the time of the loan request and the invoices paid at the end of the works.
The Sustainable Development Loan (SD)
The conditions for granting the DD Loan are the same as for the Zero Rate Eco-Loan, except that only one type of work may be involved. The maximum amount can not exceed € 21,500 and interest rates, since it is no longer a zero-interest loan, vary between 3.25 and 3.60%. The housing concerned must this time be completed for more than two years. As for the Eco-Prêt, you will have to provide the invoices paid to the bank chosen at the end of the work. Each network offers its DD Loan at the rate of its choice.
Be careful, the rates can be improved by the regional mutuals. Also, check directly with the bank branches near you.
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