Because the ecological and energy transition concerns everyone, Crédit Mutuel¹ will start distributing the Prêt Avance Rénovation home renovation loan in March². The mutualist bank will be the first commercial bank, together with LBP, to offer this innovative solution.

This home renovation loan (prêt avance rénovation) is designed to help lower-income households and retired customers (for whom access to credit can be difficult due to age or income) with a poorly insulated home to completely upgrade their property's energy efficiency without any upfront payment, affecting 800,000 individual homeowners³.

Intended to help transform housing with high levels of heat escape, this solution was adopted in the context of the French Climate and Resilience Law. What is new about this offer is that borrowers will not have to pay the outstanding amount of the energy efficiency upgrade until the time comes for the property’s inheritance or sale.

It will affect some 800,000 homeowners struggling to meet higher energy prices on the one hand, and unable to finance renovation work on the other. Bear in mind that in 2019 energy accounted for nearly 8.5% of households’ budget⁴. This item of expenditure has been rising steadily over the last ten years, and according to the calculations of the French energy regulation agency, a customer on the regulated rate (6 kVA of energy and 2,400 kWh of consumption) paid an average of €501 in 2020 for electricity versus €319 in 2007, an increase of 57% in 13 years. A Cofidis report also indicates that 32% of French people say they are not financially in a position to carry out renovation work to reduce this bill⁵.

“It is a matter of urgency that properties are renovated. This home renovation loan offers a concrete solution in the face of increased energy costs, low purchasing power and poor housing; it fulfills a gap in public policy on good housing and the climate transition where modest and low-income home owners are concerned. This is a real step forward for them and Crédit Mutuel plans to play its role in full, in accordance with its status as a benefit corporation and its efforts to combat climate change!” says Nicolas Théry, Chairman of Crédit Mutuel.

“Everyone deserves to live in a well-insulated home! The home renovation loan will be a powerful tool in reducing fuel poverty while also allowing new home owners to take action on climate change.” adds Daniel Baal, CEO of Crédit Mutuel Alliance Fédérale.

The home renovation loan will help modest-income homeowners improve their living conditions. The rate of relocation among these owners is low. They will now have the means to plan renovation work to better insulate and upgrade their homes while also reducing their energy bill. It will also have the effect of reducing the property’s energy footprint, thus adding value to it as a real estate asset.

Prêt Avance Rénovation terms
- Loans capped at €30,000 to finance renovations to improve energy efficiency;
- Repayment of the borrowed capital when the property is passed on or on death of the borrower;
- Capitalization of interest or payment by installment;
- Mortgage protection for the lending institution;
- 75% guarantee by the Fonds de Garantie pour la Rénovation Energétique (FGRE), with the possibility of early repayment after twenty years for low-income homeowners means tested by ANAH (French national housing agency).

1 Crédit Mutuel Alliance Fédérale, Crédit Mutuel Maine-Anjou, Basse Normandie, Crédit Mutuel Océan
2 Subject to the application of the decrees approving the framework agreement between the state, SGFGAS and credit institutions relating to the energy efficiency guarantee fund (FGRE)
3 Report by Olivier Sichel (Banque des Territoires/CDC) dated February 12, 2021
4 French energy and environment agency (Ademe), 2019
5 Cofidis Retail Survey 2017 conducted by GfK among 1,000 homeowners in France