The down payment is often the first question buyers ask themselves before embarking on a real estate project. How much is needed to secure a loan? Is it possible to buy without a down payment? What are the advantages of a large down payment? In this article, we answer all your questions to help you prepare your purchase in the best possible way.
What Is a Down Payment in a Property Purchase?
Definition
The down payment refers to the amount you invest in your purchase without taking out a bank loan. It generally comes from your savings, a family gift, an inheritance, or the sale of a previous property.
Why Is the Initial Down Payment Important?
The down payment plays a crucial role in securing your mortgage. The higher it is, the more it reassures the bank about your financial stability. It also reduces the amount you need to borrow, lowers the interest to be repaid, and helps you obtain better loan conditions.
What Is the Recommended Down Payment for a Property Purchase?
Minimum Down Payment: 10%
A down payment of at least 10% of the property’s purchase price is generally considered necessary to cover acquisition-related costs. This includes notary fees, loan guarantee fees, and bank application fees. This amount does not directly finance the property itself, but it is essential to complete the transaction without needing to borrow more than 100% of the purchase price.
Recommended Down Payment: Between 20% and 30%
To benefit from optimal financing conditions, a down payment between 20% and 30% is recommended. By contributing a larger amount, you reduce the sum to be borrowed, which reassures the bank and gives you access to more favorable interest rates. It may also allow you to shorten the loan term, reducing the total cost of the credit. Moreover, a substantial down payment strengthens your negotiating power—both with the lender and the property seller.
Ideal Down Payment Based on Profile
The ideal down payment also depends on your professional situation and borrower profile. Here are some benchmarks:
- For someone on a fixed-term contract or in temporary work, banks often require around 30% to offset the job insecurity.
- A couple with one permanent contract (CDI) and one precarious job will have a better chance of securing a loan with a 20% down payment.
- A couple with both partners on permanent contracts can generally borrow with a 10% down payment.
- Lastly, first-time buyers who are civil servants—considered secure profiles—can sometimes get a loan with a limited down payment, between 0% and 10%.
These figures serve as guidelines, but each application is reviewed as a whole: income, job stability, budget management, property project, etc.
Is It Possible to Buy Property Without a Down Payment?
Buying Property Without a Down Payment Is Possible, but Comes with Conditions
Some profiles can still hope to secure 100% or even 110% financing, notably:
- First-time buyers with stable income,
- Excellent banking habits,
- Solid projects in high-potential areas.
These borrowers usually present a reassuring profile: permanent employment contracts, job seniority, strict account management, and a demonstrated ability to save regularly. The strength of the property project also plays a key role. Purchasing in a high-demand area with strong rental potential is a major asset to convince the bank.
What Banks Look at When Financing a Property Purchase:
- Professional stability (preferably a permanent contract),
- No overdrafts on bank accounts,
- Saving and repayment capacity,
- Quality of the property (location, resale value).
The bank will thoroughly assess the application: income stability, saving habits, and also the value and potential of the financed property. A home in a dynamic or desirable area is more reassuring than one that is isolated or overpriced.
Limitations of Financing Without a Down Payment
- Often higher interest rates,
- Stricter loan conditions,
- Rare since 2022.
Due to tightened credit regulations imposed by financial authorities, 110% loans have become very rare. When granted, they often come with higher rates and stricter conditions (mandatory insurance, shorter repayment periods, etc.). Buying property without a down payment in 2025 is therefore still possible, but it is neither the easiest nor the most advantageous financing method.
How to Build Your Down Payment
Traditional Sources of a Down Payment
There are several ways to build your down payment. The most common is personal savings, through products like the Livret A, LDDS, Home Savings Plan (PEL), or life insurance. A gift or inheritance can also provide a significant boost. Similarly, if you already own property, selling it can be an excellent source of funds. Finally, a family loan (interest-free or at a reduced rate) can help complete your budget.
Assisted Loans That Can Be Included in Your Down Payment
Some government-supported loans can also be considered part of your down payment in the financing plan:
- Zero-Interest Loan (PTZ): Intended for first-time buyers, this interest-free loan is subject to income limits and depends on the property’s geographic location.
- Action Logement Loan: Granted to private sector employees, it helps finance part of the purchase under favorable conditions.
- Home Savings Loan: If you’ve had a PEL or CEL for several years, you may be eligible for a complementary loan.
- Local Support Programs: Some local authorities (municipalities, departments, regions) or organizations like CAF offer financial aid for property projects, especially for young professionals or families.
Down Payment and Rental Investment: Same Logic?
Fewer Down Payment Requirements for Investors
Purchasing a property to rent out can sometimes be done with little or no down payment because:
- Rental income partially repays the loan,
- Tax incentives like the Denormandie scheme or the LMNP status reassure banks.
But a Strong Application Is Still Essential
- Strategic property location,
- Accurate estimation of rental yield,
- Rent level aligned with the market.
Conclusion: What Is the Right Down Payment for YOU?
Far from being a fixed rule, the “right” down payment is the one that allows you to carry out your project with peace of mind, without putting your finances at risk. At Capifrance, our advisors support you in finding the right balance between your down payment, your loan, and your life goals.
Get in touch with a Capifrance advisor to review your situation and receive personalized support, anywhere in France.
FAQ – Down Payment for Property Purchase
Can My Down Payment Come from a Personal Loan?
No. A personal loan is not considered a true down payment by banks, as it increases your debt. The down payment must come from personal funds or assisted loans.
Do I Have to Declare a Gift Used as a Down Payment?
Yes. Any gift must be declared to the tax authorities, even if exempt from tax, especially if it comes from a close family member.
Can I Use a PEL as a Down Payment Without Closing It?
No. To use the funds, the Home Savings Plan (PEL) must be closed. However, it can entitle you to a favorable complementary loan.
Can I Use My Employee Savings for a Down Payment?
Yes, under certain conditions. Employee savings (PEE, PERCO, company PER) can be withdrawn early to buy your primary residence.
Does the Down Payment Change if I Buy New or Existing Property?
Not necessarily, but notary fees are lower for new properties, which can reduce the down payment needed to cover those costs.
Author:
Frédéric REMY, Commercial Performance Director at Capifrance
"As a professional in the real estate sector for several years within the Capifrance network, I want to share essential advice with you to help you succeed in your real estate project with our agents."
