Buyouts, renegotiation, bridging loans
Transferring your mortgage to another property and keeping your rate
Keeping your rate when moving: where to find the transferability clause in your loan offer, its conditions, and the solutions when it is missing.
Keeping your rate when changing residence is only possible if the loan offer contains a transferability clause: no text grants a right to transfer. The clause is to be found in the general conditions of the offer and its amendments. Even when written, it remains subject to the lender's agreement, is limited to the outstanding capital, and requires a new guarantee on the property acquired.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- The transfer of a mortgage to another property only exists if the loan offer expressly provides for it: no text grants a right to transfer.
- The clause is found in the general conditions of the accepted offer and its amendments, never in the amortisation schedule or in the annual statements.
- Even when the clause exists, it remains capped at the outstanding capital, the residual term is most often maintained, and the lender's agreement remains required.
- The transfer preserves a rate on already amortised capital: its advantage diminishes as the original mortgage progresses.
- The transfer and the bridge loan address two different problems: the former preserves a rate, the latter finances a cash-flow gap.
Transferring your loan to another property, and retaining your interest rate, requires a transferability clause in the loan offer. Locate it, assess whether it is worth activating, otherwise weigh the renegotiation options.
Can you retain your interest rate when changing residence?
Only if the contract provides for it. Without a clause, the sale triggers repayment and the new loan is made under current market conditions.
Even when written, the clause requires the lender’s consent, which it is free to refuse.
Find the clause in a few minutes
In the general terms of the accepted loan offer and its amendments, never in the amortisation schedule.
Look for: loan transfer, change of financed property, early repayment, security. Lost the offer? Request in writing a copy of the loan offer and the amendments. See the three clocks at the end of a credit file.
The conditions that make the transfer possible
Same borrower, capped amount, remaining term, delay between sale and purchase, nature of the property. And the lender’s consent.
- Amount: at most the outstanding capital; the supplement is paid at the current rate.
- Term: the remaining term, without extension.
- Delay: the sale and the purchase must follow closely.
- Purpose: most often the principal residence.
- Security: release of the old security, registration of the new one, two deeds and their costs.
Une composante parmi d'autres, assise sur le montant de la créance garantie. Ce n'est pas le coût de la garantie.
- En vigueur depuis le
- Source
- Légifrance
The file is re-examined and the insurance re-verified. The further advanced the loan is, the less the clause is worth.
Which banks still practice transfer?
This depends on the generation of the contract, not the brand. Only your contract is authoritative.
Regional mutualist networks have more often carried it out; online banks, rarely.
The five steps of an accepted transfer
Written request before the sale is launched, agreement in principle, re-examination of the file, addendum, then change of security.
Ensure that the same schedule is maintained for both notaries. The zero-interest loan is handled separately:
La mutation entre vifs entraîne le remboursement intégral du capital restant dû, au plus tard lors des formalités de publicité foncière ; l’emprunteur peut toutefois demander le transfert du capital restant dû pour financer une nouvelle résidence principale, l’établissement pouvant refuser si le transfert dégrade significativement son niveau de garantie
Régime propre au dispositif, indépendant de la clause de transférabilité d'un prêt bancaire classique.
- En vigueur depuis le
- Source
- Article D. 31-10-6 du code de la construction et de l’habitation — Légifrance
Transfer or bridge loan: two tools, two different problems
The transfer retains a rate; the bridge loan advances funds.
Buying before selling: the bridge loan, its three forms and its failure scenario.
Without a transfer clause: four ways to limit the cost
Sell and refinance. Check the early repayment penalty: see the profitability calculation of a renegotiation or a buy-out. A professional mobility followed by a sale of the property exempts it.
- vente du bien immobilier faisant suite à un changement du lieu d’activité professionnelle de l’emprunteur ou de son conjoint
- décès de l’emprunteur ou de son conjoint
- cessation forcée de l’activité professionnelle de l’emprunteur ou de son conjoint
Liste limitative. Le cas de la mobilité professionnelle suppose une vente du bien : une mutation sans vente n'ouvre pas l'exonération.
- En vigueur depuis le
- Source
- Article L. 313-48 du code de la consommation — Légifrance
Adjust the loan: modulate, defer or pause your instalments.
Rent out the property: your capacity must support both loans. Check the allocation clause in writing before signing a lease.
Renegotiate the whole, fees included: see the method of the renegotiation calculation.
Are you putting your property on the market? Create your file or have your clause checked by telephone.
Sources
Read next
- Mortgage rates in Lyon: current rates by loan term
- Bridge loan: how it works, its 3 forms and what to do if the property does not sell Buying before selling: dry bridge, secured bridge or buy-to-sell, what the bank actually advances, and the outcomes if your property takes time to sell.
- Renegotiating your mortgage or having it refinanced: the calculation that tells you whether it is worthwhile Renegotiating or refinancing your mortgage is only worthwhile if the interest saved exceeds all costs. The method in six lines, and when to abstain.
- Loan offer: cooling-off period, validity, and how to avoid starting over The cooling-off period is counted to the day, the validity of the terms, and the modifications that require a reissue: accept your offer without losing time.
- Adjusting, deferring or suspending instalments: getting through a difficult period without changing your loan Adjusting, deferring or suspending instalments: what each clause really costs, the condition raised against you, and the written confirmation to get.
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