In the wake of rates for traditional property loans, those for bridging loans have decreased. But their levels depend on the nature of your operation.
How to buy a second property without having to immediately sell the one you already own? By subscribing to a bridging loan. More and more households looking for a more spacious house or property have been subscribing to it again for several months now. “We are seeing a return of financing via bridging loans”indicated Thierry Delesalle, notary in Paris, during a press conference on September 10. Households thus find a way to make the date of the sale and that of the purchase coincide, a “almost impossible mission” without this mechanism, explains the broker Meilleurtaux. In 10 years, the share of bridging loans in the production of real estate credit (excluding renegotiations) has increased from around 3.5% to 7% according to data from the Banque de France.
Mobilized by second-time buyers (households that are already owners), the bridging loan sees its rate vary in a similar way to those of the traditional real estate loan. Down, therefore, in recent months. But the rate of the bridging loan is however slightly higher than that of the ordinary home loan. “On the one hand, the bridging loan is considered riskier by the bank. On the other hand, the duration of the loan is very short. The banking establishment compensates for this shortfall with a higher rate. explains Meilleurtaux. Thus, still according to the Banque de France, credit institutions distributed bridging loans at an average rate of 5.8% in the third quarter of 2024. In comparison, loans extending over a period of more than 20 years – the most expensive – were marketed against an interest rate of 4.62% over this same period.
Real estate loan: “My bridging loan has turned into a nightmare”
Dry or attached relay loan?
The nature of your loan also modifies its rate. The rate of a so-called “dry” bridging loan, that is to say when the amount of the sale of your first property fully covers the purchase of the second or you have the necessary contribution to complete your transaction, is “generally higher than that of the back-to-back bridging loan”explains the broker Empruntis. Because your loan only lasts a maximum of 24 months, the gain for the bank remains low, which encourages the latter to be remunerated more on the rate. During the bridging phase, you pay interest as well as loan insurance, but you do not repay the capital.
Conversely, the bridging loan says “backed” is aimed at households who are unable to financially cover their second purchase. At that time, the bank grants you two lines of credit: a short-term bridging loan backed by a traditional longer-term real estate loan which covers the price delta between the two properties. In this scenario, you therefore pay the interest on the bridging loan, the loan insurance as well as the monthly payments on the traditional real estate loan. The rates offered by the bank are lower, but the amount of interest on your real estate transaction will be much higher, given that you are taking out a second loan at the same time. The bank is therefore largely there.
Receive our latest news
Every week your appointment with real estate news.