Real estate: what is loan portability?

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A member of the presidential majority wants to generalize the portability provision to real estate loan offers. A measure favorable to borrowers but criticized by banks. Explanations.

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– This measure aims to make the real estate loan market more efficient

Transferability of the loan from one property purchase to another: the idea seems particularly attractive to owners who took out a property loan between 2017 and 2021, when rates ranged between 1% and 1.5%. In any case, this is what Renaissance MP Damien Adam wants, who introduced the bill in the National Assembly on May 2, 2024. The MP wishes to “generalize” the so-called clause on the transferability of real estate loans. Today, this clause can optionally be introduced in the offer of a real estate loan in order to maintain the terms of the loan when buying a new property after selling the previous one.

The bill proposes in its only article, including any offer of real estate credit, a clause indicating this the borrower can, if he so wishes, maintain the terms of the provided loan in the event of the sale of the property in order to purchase a new one. Specifically, in the case of selling a property in order to buy another one, there would no longer be a need to take out a new loan. The borrower could thus continue to use a more favorable rate than the one currently offered by the banks. If the interest rate on your first loan is lower than the current rates on your new purchase, you’re bound to be a winner ; otherwise, simply do not use this option.

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Property loan: this proposal could change the lives of those who have taken a very low rate loan

Banks are against this measure

This measure already exists, but requires a special provision in the loan agreement. However, with rates falling since 2016, many banks have stopped including this option, fearing that low-yield loans could cause them losses if rates rise. However, this generalization of portability could have a perverse effect, not least: raising mortgage rates. Banks bearing the costs of raising capital could be forced to adjust their rates to maintain their profit margins.

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