Personal Contribution For A Real Estate Loan: Can One Buy Without Capital?

There are those who prepare their real estate project by first making a personal contribution and those whose purchase meets an immediate need, even impulsive, and which do not always have a capital. Here are all the tips for borrowing without capital.

Exact definition of a banking point of view

Exact definition of a banking point of view

The personal contribution corresponds to the part financed by your personal funds, that is to say without the assistance of the bank as well as the loans aided by the State, the local authorities or some organizations.

Personal savings

Do not be fooled by the fact that, even if subsidized loans can be used to calculate your contribution, the bank looks first and foremost at the personal funds you invest in the project.
This capital can come from different sources such as:

  • Funds deposited on housing savings transactions
  • Money available on accounts-titles or savings plans in action
  • Savings deposited on bank books such as booklet A
  • Amounts from Profit Sharing (1)
  • Amounts from profit-sharing contracts (1)
  • Donations or money from a succession
  • The product of the resale of a house or an apartment
  • Homemakers (manual donations or cash advances)

(1) These amounts are unblockable in the case where the dwelling is used as principal residence.

Subsidized loans

Subsidized loans are included in the calculation of the personal contribution, which does not mean that the bank attaches the same importance as for your own funds. Among the best known loans, the loan rate 0 allows the first access to receive additional funding without interest.

Important : Beware, the zero interest loan can not be used to finance notary fees. Either the bank will use another sub-loan or it will use the main loan.

But other credits can be included in this calculation, such as the employer loan, the official loan and the home loan loans, as well as the loans granted by certain mutuals.

Can we buy without input?

Can we buy without input?

The answer is clear: or you can buy your house or apartment without personal contribution, especially if you are a young active. Banks will easily understand that you have just started your professional life and therefore have not had the time to save to build capital.

If, on the other hand, if you acquire your principal residence after 20 years of activity and you do not have a penny in advance, the bank will be entitled to think that you are not a natural saver .

This situation is however to put into perspective, because it is possible that the circumstances forced you to spend your savings (sickness, divorce, cessation of professional activity …). The whole thing will be to explain to the banker that your way of life is not responsible for the lack of personal contribution

Case of the contribution of land as part of a construction

If you own a building plot and decide to have a house built, but you do not have a personal contribution, know that the value of the land will be counted by the bank as a contribution.

It will be based on the purchase price if it is an acquisition or on the amount defined in the notarial deed if it is a donation or a succession or on an expertise if the land to build is in your heritage for many years.

110% financing

When you have no capital, the difficulty is to get a loan to finance the real estate operation itself (the purchase of your house or apartment) but also the so-called fees annexes, that is to say:

  • Notary fees
  • Warranty fees
  • Application fee

This is often referred to as 110% financing (reference to notary fees that were of the order of 10% just a few years ago).

Calculation of the contribution rate and method of calculation

Whether or not you have a personal contribution (including subsidized loans), here are the elements that will allow you to calculate your contribution rate by following the banking methods.
The calculation is made on the basis of the acquisition without counting the additional costs. It will first be necessary to calculate what is called the overall cost of the operation.

Example Nº1

Take as an example the purchase of a house in the amount of € 200,000. Let’s imagine that the borrowers are entitled to a zero-interest loan of € 15,000, an employer loan of € 5,000 and themselves have a capital of € 5,000.

Buying the house 200,000 € Bring € 5,000
Notary fees € 14,000 Employer loan € 5,000
Warranty Fee € 2,500 Zero rate loan € 15,000
Fees 1,000 € Main loan € 192,500
Total cost of the operation € 217,500 Total financing € 217,500

The employer loan and the capital available to the borrowers, ie € 10,000, will be used to finance part of the ancillary costs: 14,000 + 2,500 + 1,000 = 17,500 €. It will be missing € 7,500. The bank will be able to use part of the main loan to compensate for this € 7,500. (The PTZ can not be used to finance notary fees). However, for simplicity, we will ignore this aspect in our calculation.

Formula for calculating the contribution



[(15,000 + 5,000 + 5,000) – (14,000 + 2,500 + 1,000)] / 200,000 * 100 =

Result : the contribution is 3.75%

Example Nº2

Now take a second example with the purchase of an apartment for an amount of 150 000 € in the old. Let’s assume that buyers are entitled to a zero interest loan of € 12,000 and an employer loan of € 4,000 and that they have a capital of € 20,000.

Purchase of the apartment 150 000 € Personal contribution € 20,000
Notary fees € 10,500 Zero rate loan € 12,000
Warranty Fee € 2,000 Employer loan € 4,000
Fees 700 € Main loan € 127,500
Total cost of the operation € 163,500 Total financing € 163,500

The total of the personal contribution will be used to pay all the ancillary costs:
10 500 + 2000 + 700 = 13 200 €. It will therefore remain € 22,800 to finance the purchase of the apartment.

Formula for calculating the contribution



[(12,000 + 4,000 + 20,000) – (10,500 + 2,500 + 1,000) / 150,000 * 100 =

Result : the contribution is 15,20%

The case of rental investment

From a tax point of view, it is better to borrow the full amount when it comes to a rental investment. So, if you plan to invest in a property tax exemption Act Borloo or Scellier or even in the device Girardin Industrial, the bank will understand that you did not bring any money.

If you have capital, you can consider putting it in pledge of the loan and opt for a credit in fine. This will allow you to deduct more interest and optimize the operation on the tax plan.

Summary table of the elements of the risk analysis

We tried by a simple table to draw a summary of all the elements involved in the risk analysis of the bank. Although this table is only indicative, it has the merit of recalling that the study of a mortgage loan is primarily global, which means that the body will study and weight the result of the analysis of each of the following elements.

We gave a score of 1 to 3 for the importance we give to each element. This assessment is ours and of course each bank has its own appreciation of the files that are transmitted to it.

Personal contribution 1
Quality of account statements 2
Seniority at the employer 1
Career stability 1
Possibility of career development 2
Saver Profile 2
Income level 3
Status of the first-time buyer 2
Savings capacity 2
Risk related to the type of housing 1
The rest to live 3
The debt ratio 3