Loan Agreed (PC)

Verified 09 September 2024 - Directorate for Legal and Administrative Information (Prime Minister)

You want to know what a contracted loan is, in which cases it is granted and under what conditions? We present you with the information you need to know.

This is a mortgage for:

  • The owner who wants to do work in his main residence
  • The person who wants to own his principal residence by buying it or having it built.

The interest rate on the loan may not exceed a maximum amount.

The loan is intended to finance the following operations:

  • Purchase of land and construction of housing on land
  • Purchase of new housing
  • Purchase of old housing and possible improvements. In the case of improvement work, the amount of such work must be at least equal to €4,000 and housing has to be completed for at least 10 years.
  • Work to transform a room into a dwelling
  • Work in a housing to enlarge it, by extension or by elevation
  • Work to save energy in an existing dwelling on 1er July 1981 or for which an application for a building permit was made before that date. The amount of such work must be at least equal to €4,000.

FYI  

when the loan finances works, these must be completed within the repayment period of the loan. But you can request an extension of time for the work, in some cases (cases of force majeure, natural disaster, litigation, illness...).

The loan can finance the entire real estate transaction, but it cannot finance the following costs:

  • Notary's fees
  • Mortgage charges
  • Loan application application processing fee
  • Possible costs of purchasing furniture to furnish the dwelling.

Housing must become your principal residence at the latest 1 year after completion or purchase.

This period may be Maximum 6 years when the 2 conditions the following are combined:

  • You will live in the accommodation from your retirement
  • Until that date, the accommodation is rented out in accordance with specific rules.

The interest rate may not exceed one maximum rate.

FYI  

Within this limit, the interest rate you are offered may vary from one credit institution to another. So it's a good idea to compare multiple loan offers using your APRC.

The interest rate may be fixed or variable.

A variable interest rate (i.e. combining a fixed rate and a variable rate) may also be proposed.

The term of the loan may range from 5 to 30 years.

The loan agreement may provide that this period may be modified to either reduce it or extend it to the full 35 years maximum.

You need to ask for it from a credit institution (for example, a bank) that has an agreement with the government that allows it to grant the loan.

FYI  

It's a good idea to compare loan offers from multiple institutions, as the interest rate on the proposed loan can vary up to the maximum allowed. To do this, you need to compare the APRC of each loan offered to you.

In particular, the loan may be supplemented by the following financing:

Warning  

The loan cannot be associated with a "classic" mortgage.

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