While this was common practice for many years, the unprecedented period of low interest rates has seen this clause gradually disappear. Why? Simply because, with a falling property loan market, a newly taken-out loan generally had better terms and conditions. What does this clause consist of? Here are some explanations.

What are the conditions for benefiting from it?

The first thing is, of course, to have negotiated the inclusion of this clause in your initial loan offer. Then, when you sell the property you have bought, you need to ask for this clause to be activated, which is optional. For this transfer to take place, it must meet several criteria:

• The value of the property purchased must exceed the outstanding capital of the loan transferred,
• There must not have been a payment incident,
• The guarantee must also be transferred. The guarantee must also be transferred. If it is a guarantee body, its agreement is required, and if it is a real guarantee, it must be withdrawn and another one taken out,
• The nature of the asset acquired must be similar to or have the same use as the original asset.

When is this a good choice?

There are several advantages to choosing this transfer. Keeping an existing loan avoids new costs associated with setting up the loan, such as administration fees, guarantee fees and early repayment penalties. And if interest rates have risen between the signing of the initial loan and the sale of the property, opting to transfer the loan may prove all the more advantageous.

Case study :

The gain in interest alone in this example is €32,595.

To sum up, transferring your loan can allow you to make significant savings when the conditions are right. To find out whether your current credit allows this, the specialists at Wealth A7 and our specialist France Crédit brokerage team can advise you. Contact us now!

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