Home loan
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you only pay your monthly instalments, not a penny more
Do you have a property project?
First-time buyer, primary or secondary residence, rental investment, current loan repurchase… With the help of your PNG Finance advisor, draw up a financing plan that suits your financial situation and the type of property you want to finance.
With a PNG Finance mortgage, you can :
- borrow from 6 months to 35 years;
- the rate is 1.89%;
- Modulate your monthly payments or opt for deferred repayment;
- set up repayment levels;
harmonise your repayments by adapting the monthly instalments of your mortgage to those of your other loans, so that you have constant instalments.
Request a free, no-obligation simulation of your property project now.
You have a 10-day cooling-off period. The sale is subject to obtaining the loan: if the loan is not obtained, the seller must repay the sums paid to the buyer.
60% of European and American households own their main home, and most of them finance it partly with a mortgage. Over the last ten years or so, Europeans and Americans have started buying property at an increasingly early age: the proportion of homeowners under the age of thirty has risen by around 7 percentage points.
This is a very good time to be financing your property purchase with a mortgage. Why not take advantage of low rates of 1.89% and longer terms? What’s more, as well as protecting borrowers from over-indebtedness, the government and local authorities are doing a great deal to promote home ownership, particularly through the many subsidised loans to which you may be entitled!
To give yourself the best chance of success, make sure you’re well prepared. PNG Finance has rolled up its sleeves to explain how a home loan works and help you make your plans a reality!
How does a mortgage work?
Understanding how credit works means mastering the concept of “interest”. Interest is both the main cost of financing a property purchase and the heart of what banks do. What’s more, the way a mortgage works is not very intuitive! So here are a few explanations.
Most borrowers take out what is known as an amortising loan (more on this below). How does this work? First of all, remember that you have to pay interest and part of the capital in each monthly instalment, but the proportion of each changes over the course of the loan. What’s more :
The monthly repayments are constant;
Interest is proportional to the outstanding capital.
Interest is therefore high at the start of the loan and decreases over time. The capital repaid (or amortised capital) is the difference between the monthly repayment and the interest paid. Unlike interest, the capital repaid increases from month to month.
In most cases, a mortgage loan is combined with a downpayment. This is the amount of money you will have to pay out of your own pocket when you buy a property. Banks generally require you to put down at least 10% of the price of the property, which covers notary and guarantee fees. In practice, the more you put down, the more reassured your banker will be – but that’s no reason to dig deep, so keep a safety cushion!
Guaranteeing and insuring your mortgage
Mortgage loan insurance
You can’t afford not to take out loan insurance if you want to get a mortgage. And so much the better, because it guarantees repayment of the monthly instalments in the event of a setback. In fact, it’s a very good way of protecting you and your family.
There are several possible levels of cover, from the minimum essential to more comprehensive cover. The minimum level of cover varies according to the project. Death insurance is compulsory. It ensures repayment of the loan in the event of the death of one of the co-borrowers. It is always combined with one or more disability insurance policies. There are several types of policy covering different degrees of disability (partial or total) and inability to work (temporary or irreversible). The cost of insurance varies enormously depending on the policy, and Canada Finance can help you to minimise it.
The guarantee
To further protect themselves against the risk of non-payment, banks require that the loan also be covered by a guarantee. This guarantees repayment of the loan in the event of non-payment outside the cases covered by the insurance. This guarantee costs you around 1% of the amount of the loan. There are two types of guarantee: guarantors and mortgages (or real guarantees). The choice of guarantee depends partly on the bank: some banks will almost always favour a guarantee, others a real guarantee. A guarantee is generally less expensive than a real guarantee.
Compare to choose the best mortgage
We’ve just talked about the loan offer: this is the document that summarises all the terms and conditions of the loan offer. It is accompanied by the amortisation table, which details the monthly repayments. The loan offer will give you the exact APR for the loan and list all the costs of the credit:
. interest rate
. guarantee fees
. notary fees
. insurance rate
. brokerage fees
. bank handling charges
. account management fees
. shares in the company, . . . where applicable.
The mortgage rate, determining the cost of a mortgage loan
When you apply for a mortgage, the bank sets an interest rate based on your profile and the nature of the loan.
The riskier or less profitable your project is perceived to be for the bank, the higher the interest rate.
The rate on a mortgage loan can vary by as much as double from one bank to another. And to complicate matters, a bank may be excellent for certain types of application and much less competitive for others. When it comes to property rates, nothing can be confirmed without an exhaustive simulation. The best rate available to you from Canada Finance for a mortgage is 1.89%.
Do you still have doubts?
PNG Finance can help you find the credit that’s right for you.