Mutual guarantee fund (FMG)
A fund fed by borrower contributions when a Crédit Logement surety is set up, designed to cover claims (payment defaults) across the overall portfolio. When the loan is repaid, a portion of the contribution (typically 50–75%) is returned to the borrower. This is a notable advantage of the surety over a mortgage, where no fees are recoverable.
Key points
- Fed by a contribution paid when the Crédit Logement surety is set up.
- Used to cover payment defaults across the entire guaranteed loan portfolio.
- Between 50% and 75% of the contribution is typically returned to the borrower when the loan ends.
- The partial return is a key advantage over a mortgage, where no costs are recoverable.
Frequently asked questions
How is the FMG refund calculated at the end of a mortgage?
The amount returned depends on the original contribution paid, the actual loan duration, and Crédit Logement's return policy in force when the loan ends. In the event of early repayment, the refund is calculated pro rata to the remaining term; it is automatically sent to the borrower without any specific action required.
Why is the FMG more cost-effective than a mortgage in terms of total cost?
A mortgage incurs notary fees on registration and release fees if the loan is repaid early or the property sold before term, with no possibility of recovery. The surety with FMG involves fixed administrative fees and a contribution partly returned, making its effective net cost often lower than that of a mortgage.
Is the FMG contribution lost if the borrower sells before the end of the loan?
No. When the loan is repaid early on a sale, Crédit Logement returns the FMG portion calculated according to the applicable rules. The borrower therefore recovers part of their contribution even on an early sale, which is an additional advantage over a mortgage.
In practice
A borrower pays €1,800 into the FMG when their loan is set up. At the end of 20 years of repayment, Crédit Logement returns around €1,200, roughly 67% of the original contribution, directly to their bank account.
Official sources
- End-of-loan restitution (Mutual Guarantee Fund) · Crédit Logement
- Mortgage credit (official guide) · Service-Public.gouv.fr
- Housing and financing information · ANIL