Compared to a 25-year loan, by choosing a 15-year loan you reduce your savings capacity by 130 euros per month. If in the next 15 years you have new projects, your availability to achieve them will be reduced accordingly. It is therefore much better to place this 130 euros of savings capacity on a life insurance account that earns you interest or SCPI.
These sums invested and their interest will allow you, in 15 years, to prepay the loan, in the same way as if you had opted for a loan over 15 years. With the difference that, for the duration, this money has remained available to meet your future needs for cash or savings.
It means more flexibility and more availability. This is undeniably a financial benefit.
Imagine an investor who, 12 years ago, would have made this operation with a loan over 15 years and that happens to him today. The ADI balance the monthly installments of the loan of which it paid the 12 / 15th.
Its beneficiaries have the inheritance (the housing of 60 000 euros) plus a rent corresponding to the rent. Now imagine that this same person chose, 12 years earlier, a 25-year financing. The ADI would also have made the remaining monthly loan payments while our investor would have paid only 12 / 25th of the loan. His successors would receive exactly the same patrimony and the same rent. But this time, the latter would recover, in addition, the capital invested and its interests by benefiting from the privileged tax framework of life insurance, namely no inheritance tax.
TAX BENEFIT :
The longer you borrow, the longer you will have a property deficit, and therefore tax savings. The more you reduce the loan term, the sooner you will pay taxes.
You benefit therefore:
- a Leverage Tax effect: interest on the loan is tax deductible: it is therefore the State that finances the cost of your loan via the tax reduction
- a Financial Leverage: you grow money at a rate higher than the one you pay to borrow (Performance SCPI)
- an investment opportunity on another medium such as life insurance or performance SCPI.
Classic (amortisable) loan or in fine, variable or fixed rate, free of charge, deferred or anticipation?
Different types of loans are offered to you, each with advantages and disadvantages. The choice of the loan is important because it can increase your tax savings, for example via a loan repayment in fine: the first years you only pay the interest which increases your property deficit and therefore allows you to reduce your tax.
Get help from a consultant!
The choices on financing are complicated, and depend on your personal situation. We really suggest that you hire a consultant, who is well versed in all these techniques and can even put you in touch with a banker to get a better rate.
Warning ! The loan over a long period should not be systematic. Each situation must be analyzed in particular and be subject to detailed tax and financial studies to enable the implementation of the financing best suited to the interests of the investor.