Residual savings (post-transaction buffer)
The amount of savings the borrower retains after injecting their personal contribution and paying all acquisition costs. Banks typically require 3–6 months of loan instalments held in reserve to ensure the borrower can absorb an unexpected event without defaulting. A very high down payment with no residual savings can paradoxically weaken a file in the eyes of a credit analyst.
Key points
- Banks check that 3–6 months of instalments remain available after completion.
- A large down payment that depletes all savings may be flagged as a risk factor.
- The broker should include post-acquisition savings statements in the application file.
- Strong residual savings can offset a slightly elevated debt ratio in analyst assessment.
Frequently asked questions
Why does a bank care about savings left over after the purchase?
The bank wants to confirm the borrower can absorb a setback, job loss, unexpected expense, without missing an instalment. Holding several months of repayments in reserve demonstrates that buffer capacity.
How should residual savings be presented in a loan application?
Simply attach the last three months of statements for all savings accounts (livret A, life insurance, PEL), confirming those funds are not used for the down payment. The broker then computes the months-of-instalments-covered ratio and notes it in the summary sheet.
What is the difference between the personal contribution and residual savings?
The personal contribution is the amount injected into the transaction (purchase price + costs), while residual savings are what remains afterwards. The two are complementary: a high contribution improves LTV, but adequate residual savings reassure the analyst about the borrower's financial resilience.
In practice
A borrower contributes €40,000 on a €200,000 purchase including fees. If €10,000 remains in their savings account (roughly 4 months of a €2,500 instalment), the bank considers the buffer adequate.
Official sources
- Obtaining a mortgage loan · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr