Prospective homeowners in France can benefit from reduced mortgage rates of 0.10 to 0.30 points when purchasing energy-efficient properties rated E, F, or G, provided they commit to energy renovations within 40 months. For example, a buyer financing a F-rated home can save nearly 6,000 euros over 25 years by achieving a two-level improvement in energy performance. This initiative, supported by partnerships with renovation experts, aims to facilitate a long-term energy transition in housing.
Exciting News for Future Homeowners
Great news for prospective homeowners looking at properties with energy performance ratings of E, F, or G. As France gradually imposes rental bans on these less energy-efficient homes, Banques Populaires and Caisses d’Epargne (part of the BPCE group) are introducing an innovative offer. Starting Wednesday, January 8, buyers of these thermal sieves can enjoy a mortgage interest rate reduction of 0.10 to 0.30 points, provided they commit to undertaking energy renovation work within 40 months to enhance the energy performance rating by two levels. This offer is open to all buyers, whether they are existing customers or new clients, and applies to both primary and secondary residences, as well as rental investments.
Understanding the Financial Benefits
Consider the scenario of an individual purchasing a type F home priced at 170,000 euros, with an additional 30,000 euros earmarked for energy renovations such as insulation and installing a heat pump. To finance the property and renovations, Banques Populaires or Caisses d’Epargne would provide a mortgage of 200,000 euros over 25 years at an interest rate of 3.45%. After completing the renovations within a year, the home achieves a D rating, improving the initial score by two levels. Consequently, the client benefits from a mortgage rate reduction of 0.20 points, lowering it to 3.25% for the remaining 24 years of their loan.
This average reduction of 0.20 points translates to significant savings, potentially reducing the overall mortgage cost by approximately 5,918 euros during the repayment period. According to Cédric Glorieux, this nearly 6,000-euro savings can help finance part of the renovation work, which is typically around 19,000 euros. Additionally, improving the DPE rating by two classes can lead to substantial energy bill savings, reducing costs from 3,450 euros to 1,200 euros annually, resulting in a yearly savings of 2,250 euros.
Clients can receive guidance throughout the renovation process, from energy audits to project completion, through partnerships with renovation specialists like Leroy Merlin, Cozynergy, and Izi By EDF. However, if the energy renovations fail to achieve the two-class improvement on the DPE, clients will retain the original interest rate negotiated with their advisor, as confirmed by Glorieux.
This initiative, which started rolling out in mid-December, is set to be widely available at Caisses d’Epargne and Banques Populaires locations by mid-January. Glorieux emphasizes that this is not a temporary offer but a sustainable option aimed at supporting the long-term energy transition for housing in France. Data from the Ministry of Ecological Transition indicates that homes rated E, F, and G make up nearly 31% of the private rental market.