What is a zero interest loan
The zero-rate loan is defined as a state-assisted loan. And as its name seems to indicate, it is granted to the beneficiary who is most often a first-time buyer without interest. In order to promote the home ownership of a larger number, the government has introduced a new zero loan scheme since 1995. Called zero-rate loan plus, it is intended for a certain class of people. This article gives you some interesting details about the zero rate loan.
Zero Rate Loan Plus
The 2011 finance law gives birth to the new PTZ plus (PTZ +) which enriches the previous system (enhanced ceilings, geographic variable and energy performance.) Applicable for the new as for the former had to merge three measures:
- Land Pass,
- Tax credit.
It aims to encourage (until 31/12/2015) the energy renovation of old housing in France. Open unconditionally to “homeowners residence principal residence built before 1990 but also to the unions of co-owners.
The characteristics of credit rate 0
The zero-rate loan, which is still known as a zero-plus loan, is a real estate loan with no charge to the beneficiary. In addition, interest is fully borne by the state. It is for this reason that we speak of zero rate loan. But like any loan, it is refunded. Thus, the maximum repayment term of the 2011 zero-rate loan is 25 years. This new arrangement replaces the tax credit on loan interest and many housing benefits.
Key Dates: Zero Rate Loan History
- 1995: Helping the French to become ” first-time buyers “, creation of the device
- 2005: Strengthening with the PTZ Finance Law; possibility of purchase in new or old without condition of work.
- 2006: Reassessment of Resource Limits for Area A.
- 2014: Improvement of PTZ to revive construction
- 2015: Publication of a map of 6000 municipalities eligible for PTZ.
- 2016: Revision of the conditions of attribution and terms of the loans with zero rates.
The people concerned by the zero rate loan
As mentioned in the introduction, this new zero loan is for first-time buyers. These are people who have not been homeowners for the last two years prior to the purchase of a property. In other words, it is a device that has come to give a helping hand to tenants wishing to become owners.
That is why, to allow a greater number to have access to it, it is without rigid conditions of resources. However, the amount granted depends on various criteria including the geographical area and energy performance of housing and the composition and resources of the home.