Abolishing interest rates for real estate: new conditions of access, states Bruno Lemaire

Minister of Economy Bruno Lemaire announced that the conditions for accessing interest-bearing loans will be relaxed to allow an additional 6 million people to benefit from the program. "In light of rising interest rates, we will expand access to interest-bearing loans by simplifying the scale and raising the maximum amount," Lemaire said in a Saturday interview for regional newspaper Sud Ouest. The terms of the interest-bearing loan will be relaxed so that an additional 6 million people will be able to benefit from the program," the economy minister said amid the real estate market crisis. "This will be done in the coming weeks so that 6 million additional French people can benefit from this program," he added.

The interest-bearing loan

The interest-bearing loan allows families, mainly first-time buyers, to limit the cost of financing their primary residence in a new home and, with the work, improve energy efficiency in their old home. As the name implies, an interest-only loan does not require interest payments.

Changing the income scale

In an interview in late September with Le Parisien newspaper, the minister mentioned the revision of the scale to ensure that younger families have access to the program. The income limits that must be not exceeded to qualify for this government loan depend on the municipality in which the property is purchased. They are categorized by letters from A to C, reflecting more or less severe imbalances between supply and demand. "In addition, 154 new municipalities will be included in stressed zones classified as A and will therefore be eligible for intermediate housing and a new interest-bearing loan from 2024," added Bruno Lemaire, noting that 4.5 million residents will be affected.

The fall in housing loans

The real estate market has been hit hard by rising interest rates, started a year and a half ago by central banks and then passed on by retail banks in their lending policies. New housing loans, excluding refinancing, fell below the 10 billion euro mark in France in August to 9.9 billion euros, the first time in seven years, the Bank of France said Thursday.