Should you borrow more than the exact price of the property?


The price of an apartment or a house does not by itself define the amount that the buyer will have to pay to acquire it. Indeed, the purchase of a property involves many additional costs.

What are these fees? Can we finance them through a mortgage? Is this the best solution to adopt? We take stock of the issue.

What costs should you expect in addition to the property?

Depending on the borrower’s project, the costs associated with the acquisition of a home vary, in particular depending on whether he is investing in new or old. However, they are not non-existent and represent, on average, 10% of the price of the property.

Here are the main additional costs that the purchaser will have to bear:

  • Notary fees: count from 2 to 3% of the amount of the acquisition for a new property, and from 7 to 8% for an old property
  • Agency fees: if you go through an agency or a real estate advisor, the latter will be remunerated by a commission
  • Brokerage fees: like agency fees, brokerage fees are due to the broker who negotiates the bank loan for you
  • Bank charges: to subscribe to a loan, the bank charges application fees to study your situation and set up the loan, they are of the order of around one hundred euros to around 1,000 euros
  • Moving costs: we don’t always think about it, but in the case of the purchase of a principal residence, you will have to move, which depending on the distance to be covered and the volume of furniture to be transported may turn out to be more or less expensive

Finally, as part of the purchase of old housing, you may have renovation or rehabilitation work to do. Likewise, as part of the purchase of a new or recent home, you may wish to finance an extension, a swimming pool or even a garden shed.

Is it possible to ask for more than the price of the house or apartment from the bank?

Yes, it is completely possible. But two cases are to be distinguished. The first concerns the ancillary costs of the property, we then speak of 110% financing. The second relates to the realization of work, it is then an integral part of the purchase price.

110% financing for ancillary costs

The 110% real estate loan assumes that the purchaser does not have a personal contribution. This financing is possible, but it is concretely more difficult to obtain and must be the subject of an upstream reflection on the part of the borrower.

Indeed, the banks subordinate the access to the loan to a certain number of conditions. Among them, we find the personal contribution up to a minimum of 10% of the purchase price of the property. This contribution is intended to cover ancillary costs and protect the bank in the event of non-payment.

Concretely, this type of financing is most often granted to the following borrower profiles:

  • First-time buyers beginners in working life: the lack of contribution is easily explained and this is an interesting profile for banks wishing to retain their customers as soon as possible
  • The tenured civil servants : their protective status ensures the regularity of their income and protects them from dismissal unlike employees in the private sector, financing at 110% is therefore more easily accessible
  • Big savers : borrowers with a lot of cash on hand may prefer 110% financing to grow their savings, especially if the rate of their investment is higher than the rate of their mortgage
  • Real estate investors : for a real estate investment to be profitable, it is preferable that a maximum of charges can be deducted and that the borrower’s cash flow is preserved, the absence of contribution is therefore legitimate in the presence of expected rental income

Be careful, although the 110% loan can be granted subject to conditions, it is not always the most profitable option. Indeed, to grant such financing and assume the potential risk, banks do not hesitate to increase the interest rates offered. You should therefore be vigilant and take out your calculator to see what is most interesting, especially if you have sufficient financial reserves to make a personal contribution.

Additional funding for the work envelope

The purchase of real estate is often accompanied by work. They are intended to improve the existing to make it habitable, improve energy performance or even create additional living spaces indoors or outdoors.

The amount of the work can be integrated directly into the financing. It will simply be necessary to provide quotes to the bank. In this case, financing beyond the purchase price is easily obtained, within the limit of its borrowing capacity of course.

The financing of work in the mortgage is more advantageous than financing through a consumer credit. Indeed, you only have one monthly payment and only one rate (more advantageous) for your entire real estate project. Be careful, however, the financing of the work by the bank does not exempt you from personal contribution.

Ultimately, borrowing more than the price of the property is possible, but this choice is only wise for certain borrower profiles, of which the number is limited.