Buying real estate: Know how to negotiate with your banker

Take care of your borrowing profile

The trick is to make a good impression! A good personal contribution is the key to a successful financing plan. Your savings, a donation, a family loan or even certain subsidized loans (0% interest rate loan, home savings loan, loans granted by the CAF, etc.) can help you build it up. The larger the sum you have at your disposal before taking out a loan, the better the terms granted by the bank.
If you don't have a downpayment, don't panic! You'll be able to borrow, but the conditions will be less advantageous and your banker will ask you for more guarantees. In particular, he'll be looking at the sustainability of your income (length of service, job security).

Prepare a financing plan

Drawing up a financing plan lets you know where you stand financially. This will enable you to negotiate with your banker, putting forward quantified arguments. This means :
- assessing the savings you have (savings, proceeds from the sale of a property, etc.)
- estimating your repayment capacity before choosing between the various mortgage formulas.
- anticipate changes in your resources and future needs.
In concrete terms, there's no point in embarking on a project that exceeds your financial capacity. You risk being unable to cope, and your dream can quickly turn into a nightmare. To calculate your budget, start by drawing up a list of your regular resources (salaries, investment income, etc.), automatically excluding any random or episodic income (bonuses, family benefits, etc.).
Next, deduct all your debts (car loan, purchase of furniture or household appliances) and list all expenses directly linked to your real estate project: fees, transfer duties, taxes of all kinds... You now know your borrowing capacity, i.e. how much of your budget you can devote each month to repaying your loan. Ideally, this should not exceed 33% of your monthly income.

Negotiate the key points

To negotiate your loan as effectively as possible, it's best to understand the various components of financing.
- The rate: if it's fixed, compare several mortgage offers and choose the best one. If it's variable, you need to know the bank's margin and the index that causes the rate to vary.
- Insurance: make the most of the competition! It's perfectly possible to ask for your insurance to be delegated.
- Early repayment penalties are a key point to negotiate. Remember to ask for these penalties to be waived when you apply for financing.
- Application fees: you should be aware that banks and brokers can work without application fees (this is not a general rule), but if you ask for nothing, you get nothing.
- Guarantees: you'll often have a choice between a mortgage guarantee and a surety bond. Contrary to popular belief, a surety bond is not necessarily the least expensive.

Loan rates
Note that rates are higher for longer terms (20-25 years) than for shorter ones (10-15 years).

Stéphanie Swiklinski