By signing a mortgage loan offer, everyone imagines themselves handcuffed by a fixed monthly payment, set in stone, until the very last due date. But fortunately there is the possibility of adjust loan maturities, which allows their amount to be modified along the way. Did you know? “ There are modulation rules in each of the loan contracts of each of the banksexplains Ludovic Huzieux, founder of Artemis brokerage. This is provided for in the general conditions“. There is therefore no need to negotiate anything, as may be the case for early repayment penalties.
However, each establishment has its own conditions. The rules in force at BNP Paribas differ from those of Crédit Agricole Île-de-France, which are not quite the same as at Caisse d’Épargne PACA: “ There are about as many adjustment options as there are banks and home loan versionswarns the expert. It is therefore better to read the fine print of the 30 pages of your loan offer to find out what they are. “.
An immutable fixed rate
One of the advantages of modulation is its lack of impact on the nominal rate, even if market rates have exploded in the meantime or if it was initially higher. Finally, it is only possible to play on the “duration/monthly payment” slider. Often, this clause is framed: modulation is only possible after 12 or 24 months of initial amortization, within a limit of 10 to 30% of the initial monthly repayment, with a modification of the duration which often cannot exceed 2 or 3 years compared to the initial duration.
Triggering a modulation is relatively simple since it does not require a loan renegotiation or a credit repurchase. In general, a quick review of your repayment capabilities is enough to see if the new due amount respects your debt ratio. There is a point of vigilance regarding your loan insurance : “ If it is not that of your bankwarns Ludovic Huzieux. VYou must notify it and send your amortization table and the rider because the modification – increase or decrease – of the duration influences the amount of the insurance premiums “. Without forgetting the administrative costs for reissuing your amortization table and an amendment, which vary between 50 and 300 euros.
Up or down modulation
Modulation can prove useful in certain moments of life: promotions, career changes, temporary setbacks or unforeseen life projects. For an upward modulation of a loan maturity, the repayment of the capital is accelerated since the duration of the loan decreases and therefore ends up costing less. “ In this sense, banks are often more flexibleremarks Ludovic Huzieux. As the risk for the establishment decreases, it is sometimes possible to negotiate directly with your advisor to go beyond the limits provided for in the contract and boost your monthly payments beyond the initial ceilings.“.
On the contrary, if we need to give backoxygen to your monthly budgetmodulation makes it possible to reduce the amount of the amount withdrawn by extending the remaining duration of the loan. On the other hand, this operation has a cost. By paying less each month, the capital is amortized more slowly, the interest accrues over a longer period, so it costs more. It’s mathematical! In fact, we must see this modulation as a financial management tool because it allows credit to live at the pace of the borrowers’ lives, transforming a debt into a flexible and adaptable financial lever.
