7. Subsidised French Mortgages

1. 7.1. What are Subsidised French Mortgages?
   7.2. Interest Free Mortgages
   7.3. French Employer Loans
   7.4. Social Loans
   7.5. Paris Loans
   7.6. Home Purchase Savings Accounts

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7.6. House Purchase Savings Accounts in France

There exist two interest-earning bank accounts which give access to a mortgage. They are probably of little interest to most expats, as they offer few advantages, but we include them here for completeness.

Both accounts are likely to be of greatest interest to those not in a rush to obtain a mortgage and who seek an income tax shelter.

They are can also be used to assist family members with house purchase, although there are other approaches that may be more effective and efficient.

One of the main advantages of the mortgages is that there are no lender fees payable.

The terms of the accounts are broadly similar although, as there are some important differences, each one will be considered separately.


i. Compte Epargne Logement

Savings Account

A CEL can be held by children and adults alike and all members of the household can hold an account.

There is a minimum opening deposit of €300, a minimum annual deposit of €75 and a maximum balance of €15,300.

Cash can be withdrawn at any time subject to retaining the minimum €300 balance.

The rates of interest are lower than can be found in a regular account, with a current rate of interest of 2.75%.

However, a government lump sum payment calculated at the rate of 0.75% is granted to the borrower when a loan is taken out.

The maximum amount of this sum is €1144.

The account is also is exempt from income tax, except social charges (CSG/CRDS), which are charged at the rate of 11%.

Mortgage Loan

In order to qualify for a mortgage the account must have been open for at least 18 months and the applicant must meet the lenders normal income criteria.

The mortgage can be used to buy main home, a home for family member, a home for normal letting or a second home but, in this case, only if it is a new property.

The mortgage can also be used to fund improvement works to the main or a second home.

One of the weaknesses of the CEL is that the maximum loan amount available is €23,000. This rule applies even though a couple or a household may hold multiple accounts.

The rate of interest on the loan varies by lender and duration and type of loan. The rate is not necessarily better than might be found on a standard mortgage.

To open an account contact your local bank, Credit Mutual or La Banque Postal.


ii. Plan Epargne Logement

Savings Account

The PEL operates on very similar basis as that of a PEL, and the account can be opened alongside a CEL within the same bank, which will ultimately gain access to two or more subsidised mortgages.

The initial deposit cannot be less than €225 and annual deposits of not less than €540.

The maximum balance is €61,200 and the minimum deposit period is four years.

Interest is 2.50% to which is added a government lump sum payment on taking out loan equivalent to 1% interest up to maximum sum of €1525.

The interest is exempt from income tax, except social charges at 11% at end of load period, or closing of account.

To open an account contact your local bank, Credit Mutual or La Banque Postal.

Mortgage Loan

The mortgage loan can be used for construction or purchase of main home, the purchase of second home if new or the purchase a property for normal letting.

The rate of interest on the loan varies by lender and duration and type of loan. The rate is not necessarily going to be better than you might find for a standard mortgage.

The maximum loan is €92,000 for a ten to fifteen year term. It can be used with a CEL up to the €92,000 total limit.

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